Bank of Hawaii to elicit ideas from ads
By Frank Cho
Advertiser Staff Writer
The new chairman of Bank of Hawaii yesterday said he wants to know what people think about his struggling bank and is launching a monthlong marketing campaign to find out.
Advertiser library photo
CEO Michael O'Neill plays a leading role in the new ads.
Advertiser library photo
The ads come in response to declining marketshare and years of complaints about falling customer-service levels at Hawai'i's biggest bank.
"I think what I am trying to do is say look, I take this seriously and please let me know what you think," O'Neill said. "The point we are trying to get across is for customers to tell us what they want us to do."
O'Neill told a Rotary Club luncheon in Waikiki yesterday that the bank had lost touch with its customers.
"And I think that has had an impact on our following and our market position," he said.
Pacific Century Financial Corp., the parent company of Bank of Hawaii, has struggled financially over the last four years. The Honolulu-based bank holding company, which had grown bloated during the so-called bubble economy of the 1980s, struggled when the state economy slowed starting in 1992 and several Asia countries went into a financial tailspin five years later.
"It's no secret that Bank of Hawaii was facing some serious financial problems related to credit quality issues," O'Neill said. "These problems damaged our credit ratings, got us intimately acquainted with our federal regulators and hampered our ability to conduct some aspects of our business."
In response, the bank started a two-and-a-half-year restructuring program in 1998 named "New Era" that raised fees, closed dozens of branches and cut thousands of jobs in an effort to pare expenses and raise revenues to satisfy Wall Street.
"I think it was really necessary because the bank had really picked up a lot of baggage over the years and was really a quite inefficient company," said O'Neill, who joined the bank in November to replace retiring CEO Lawrence Johnson.
Since taking over the top job at Bank of Hawaii, O'Neill has decided to sell or close nearly all of the bank's operations outside of Hawai'i and the western Pacific by the end of the year.
"We just couldn't stay married to strategy that wasn't working," O'Neill said.
O'Neill said he has received a lot of interest in the bank's financial empire and will be talking to Westpac Banking Corp., Australia's third-biggest lender, about divesting Bank of Hawaii's South Pacific assets. But Asia is going to be a more difficult sale.
"Asia was one, in all likelihood, we would have to wind down," O'Neill said. "We will know that within the next three weeks."
The bank already has sold its $224 million credit card portfolio to American Express to raise cash, creating some of the growing resentment by customers that O'Neill is hoping to reverse.
"The gain from the sale of the credit portfolio went a long way to helping us. It was because of the sale we were able to move quickly to restore much of our financial health and correct some of the big credit problem issues," O'Neill said.
O'Neill said the bank is putting another 165 people back into customer-service-related positions in its branches. The bank is also asking for feedback.
Four tongue-in-cheek commercials are scheduled to run through June featuring O'Neill. The first two have the bank chairman sitting in his office, looking directly into the camera, asking customers to e-mail him with suggestions. The second spot has O'Neill, whose computer has supposedly been overwhelmed by e-mails, now asking customers to "write a ... letter" to him.
O'Neill said a team of employees will be compiling the suggestions he receives from customers.
"We are not going to be the cheapest bank in town. We offer too much in terms of services," O'Neill said. "But we want people to feel like they are getting value for their money."