BANKING : Banks Urged to Add Minority Executives

With the head of First Interstate Bancorp telling them Thursday that the banking industry faces competitive challenges that will lead to lower employment, black bankers meeting in Los Angeles this week called for the industry to hire more minority executives.

Appearing at the Biltmore Hotel before the National Assn. of Urban Bankers, a 15-year-old national organization of black bank executives, Joseph J. Pinola, chairman and chief executive of First Interstate, said increased competition from foreign banks, the growth in information technology and the effects of bank deregulation have combined to make the industry more competitive but with slower job growth.

“Not long ago . . . it took a small army of clerks equipped with green eyeshades and rubber fingers to operate a back-office check-processing department,” Pinola said. “Today, much of that process has been automated.”

Since bank deregulation began about a decade ago--resulting in the elimination of ceilings on savings deposit interest rates and permitting payment of interest on checking accounts--competition has increased. This has cut into bank profits and prompted widespread cost cutting and fee raising. Banks have raised checking account fees, installed automated teller machines and consolidated branches.

Meanwhile, banks have also had to contend with the entry of foreign institutions into the U.S. market--particularly those from Japan, which is now home to the world’s 10 largest banks in terms of deposits.

Still, the industry remains one of the United States’ largest employers, with about 1.6 million people employed at the nation’s 15,000 commercial banks, according to the Federal Reserve System. Yet some fear that blacks will lose ground in the executive suite as banks close branches, pare staffs and consolidate operations in an effort to operate more efficiently.

“Banks are slimming their payrolls,” said Damita J. Barbee, an assistant vice president at Wells Fargo Bank who is also president of NAUB. “Most of the opportunities lately have been in entry-level jobs. . . . Minorities aren’t making much progress into upper management, and we want to address that here.”

While about 50% of bank executives and professionals are women, an American Bankers Assn. study last year found that only about 4% to 5% of management positions at banks are held by blacks. It also found that between 1982 and 1987 the percentage of black professionals actually fell slightly.

Barbee said NAUB has formed a task force that plans to meet with top officials of the traditionally conservative banking industry to discuss the paucity of minorities in management. She argued that blacks can help banks market their services to minority communities and help make their employers more sensitive about closing branch offices in minority neighborhoods.