East Palo Alto's first bank in many years is shutting its doors. California Bank & Trust announced on Friday, May 20, that it will close its branch bank, which is located at 1735 E. Bayshore Road in the Ravenswood 101 Shopping Center. This announcement was made to the branch's employees on the same day that letters were sent to the bank's customers. The branch's closure is effective on Friday, August 26 at 12:00 p.m.
When California Bank & Trust opened the East Palo Alto branch in February 2002, it was considered a real boon to the community. Prior to the branch's opening, the bank had representatives working within the city, attending events and meeting community members in order to pave the way for the city's new branch bank.
Now, the East Palo Alto bank, which was one symbol of the city's new growth several years ago, has, apparently, become a victim of today's economic realities. The letter, which announced the branch's closure, stated that all accounts serviced by the East Palo Alto branch "will automatically transfer to ...[the] Mountain View office, located 8.5 miles away at 700 W. El Camino Real." Bank customers were also informed that their banking needs can be serviced either at the Mountain View branch or at any of the branch's other locations. California Bank & Trust currently has 16 branches in the Bay Area. The next closest branch to East Palo Alto is located in the City of San Mateo.
Steve Borg, California Bank & Trust's senior vice president and marketing director, said that closing the East Palo Alto branch was "a serous and difficult decision" and that bank officials had to balance service delivery, operating efficiency, competitiveness and long term profitability prospects. When asked how many more clients would the branch have needed to keep it open, Borg replied that it would have taken a lot more deposits and loans and that the East Palo Alto branch was marginally profitable, given the expenses it took to keep it operating.
Borg pointed out that California Bank & Trust is primarily a bank which caters to business and professional clients, which explains why it serves a wide geographic area, while other banks are commercial retail banks, which have more locations.
The East Palo Alto branch has approximately five full-time employees. Borg said that they will be given an opportunity to apply for positions in the bank's other branches. Those employees, who cannot find employment in one of the other branches, will be given a severance package.
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