And this merger will be good for whom?
BB&T stands for what? And which sort of' banking' business do they perform and for which clientelle? This sounds like a merger only an insider investor could like.
1
This merger should be stopped. It represents a move towards a monopoly and is not in the best interest of the people. We are talking about two large banks already - so no new jobs, etc. as some claim would result. Just my thinking, but we don't seem to learn from our mistakes, so ... oh well. ?
3
If Wells Fargo survived a serial pattern of anti-consumer offenses, why punish BB&T and Sun Trust for working within the law?
Yup, that’s about right: 10 years to completely forget the lessons of the last crisis. Whether the bubble is S&Ls, derivatives, dotcoms or real estate, you always know that mergers are an early sign that the end of the good times is coming.
3
This is going to be interesting, assuming the merger happens. BB&T has had the most remarkable ability to perform so well for its relatively small customer base (amazingly strong customer service metrics), but I'm not sure the same can be said for Suntrust, which is more in the mold of big banks that focus on automation and fees to make money. BB&T's customer service model is the one that the merged bank should follow, but it remains to be seen which of these two banks is in the driver's seat on this merger.
4
This is bad news coming on top of this:
https://www.theatlantic.com/magazine/archive/2019/03/how-kleptocracy-came-to-america/580471/
1
I am a longtime customer of BB&T which over the past several years closed three branches near my home forcing me to drive much further to access ATMs and bank services that used to be within walking distance. By closing these branches, it also eliminated jobs. I have to pay roughly $6 per ATM transaction at non-BB&T bank.
This merger with Sun trust is directed at eliminating jobs and saving the corporation about $2 billion in wage costs. It does nothing to increase consumer access and I predict that Sun Trust will close its branches as well.
Mergers of this sort should be banned as just expanding monopoly power and cutting jobs. It will also eventually cause higher customer costs, such as my own where local customers have no adjacent branch.
Banking services for lower income people with small balance is too expensive; as other commenters have written it is mainly credit unions and not banks that do this public service.
6
@john I agree completely. To accomplish this we must secure the integrity our elections and then vote like everything depends on it.
3
"Executives said the new institution would be able to save money by shutting side-by-side bank branches and cutting overhead costs. The banks would most likely shed deposits and branches in some cities to pass muster with federal regulators."
Isn't competition supposed to be what makes capitalism good?
5
This merger is shameful. The stated purpose is to increase profits. To do this, the banks plan to reduce service by closing branches, and fire a lot of people. The avowed basis of the merger is to strengthen the banks to compete with online banks and with mega banks. It seems both BBBT and Sun are doing ok as it stands so why merge them?
And it was the merging of the banks that in large part got them into the 2009 meltdown.
Further, the US has been on a merger binge for two decades in airlines, manufacturing and even restaurants, with the result of lower levels of service and the loss of many well paying jobs. This is the time and place to state enough!! Another large bank we don't need.
4
I wonder how a much larger, regional bank - allowed to grow through merger by our US government - would respond to connected borrowers with sketchy credit histories? for example, would Eric Trump of TO get the nod on a multi million dollar loan to buy or build a new Trump golf course or super-duper hotel in Atlanta or Charlotte? how about a loan for a new string of suburban garden apartments for the Kushners, or another refi on the Tishman Building? and Mnuchin or Ross are surely smart enough to use the approval to make a play with more favorable terms than otherwise available. does anyone trust this bunch as far as they can throw them? we have the foxes invited into the henhouse, and their price of admission is cheap promises on issues like guns, the border, and abortion.
4
In a way, America has too many banks. People said it is about competition and will protect consumers simply take one facet without considering other deficient factors. While onerous regulations can be regressive, consumers must be protected from manipulations and even coercion by financial institutions, big and small alike
1
Big. Bigger. Biggest. What could possibly go wrong? No doubt the rest of the global economy (the one we collapsed in 2008 through reckless de-regulation) is watching these and related developments with interest. But hey - who said being Leader of the Free World was easy. On others.
4
When the banks are basically saying they don't care if people lose jobs--they'll "make it up" to the customers. Yea, okay. That's why it's so important to be financially independent--invest in gold and stocks.
3
Just what the world needs. Another large Bank with hardly any branches, and a skeleton crew in the few branches they keep open. Everything is online now. My husband and I have banked with Capital One for many years. 2 years ago they shut down the branch across the street from our house. Then they shut down both of the next closest branches a few miles away. So the bank is saving all of this money by inconveniencing customers ( certain transactions have to be done in person at the bank, especially when you have a business), but at no time lowering our fees, raising the interest rates on savings or lowering rates on credit, or increasing the wages of the employees they haven't laid off ( the non c-suite employees).
Are we're supposed to be impressed about BB&T/SunTrust investing the money they're saving on branch overhead on technology? Because we all love automated systems so much more than interacting with human beings. Maybe they can come up with a system where customers actually can handle issues without speaking to a live person. That way we don't have to spend 10 minutes convincing the automated system to let us speak to a representative.
5
“while they plan to eliminate lots of jobs, they would plow the savings into technological innovations that fostered greater competition with the nation’s largest banks.”
Small consolation for the eliminated employees. Also, it is quite a hit for a town the size of Winston-Salem to lose BB&T headquarters, and seemingly unnecessary. Keep the headquarters there, and bring up any Sun Trust folks. I’ve lived both places and know Atlantans would be hard pressed not to love it.
5
Before we get all agitated about yet another set of bankstas reaching the "Too Big To Fail" class, may I suggest a work-around?
Credit Unions. Move. Your. Money.
Credit Unions are Non-Profit financial cooperatives that are member owned, and pay higher interest on your saving, while simultaneously charging lower interest on your loans.
How could they possibly perform this financial miracle, you ask? What part of 'Non-Profit' did you not understand?
I have a safe deposit box at my local bank, as my credit union does not have a vault....so I visit both on an ocassional basis. The entire local branch office of my credit union , including offices for the manager, two loan officers, and space for four teller stations - would easily fit into the windowed office of just one of my local banks' vice presidents. The pomp and luxury found in even the smallest bank is paid for by the depositors and loan recipients....in lower savings interest rates, and higher loan rates.
Move. Your. Money.
8
What could possibly go wrong! History repeats.
7
Mark this as the first day of the new crash.
We no longer have Obama to save us.
1
Use a credit union.
4
Republicans react to bank/donor complaints with deregulation. Monopolistic bank merger follows. Rinse and repeat!
5
Just what we need is another monopoly.
2
@Marjorie Nash There are 10 major US banks and 10+ major international banks in the US now. The merger of these two banks creates one of the smaller "major" banks in the US (#6 of 10 by assets). Where is the monopoly?
2
It probably does require big institutions to compete globally. The too big to fail problem resulted from inadequate reserves to cover the losses incurred by the banks. Require that they have bigger reserves and that problem becomes less likely.
1
@Casual Observer I disagree. If that were true then the smaller banks would have died long ago.
The real reason for scale is the outsized profits and political power accruing to mega banks.
5
@Mark Small banks began their death march about 20 years ago. More than half of the nation's banks that existed in the year 2000 have either gone broke or been merged into other institutions. They may have nice, smiling tellers, but they are unable to provide all the services that large banks can provide and that most consumers WANT. Have you ever gone into a small bank and asked to do a foreign currency transaction?
3
@Farthingham I actually have been acquainted with several people who started small banks. They still exist and many are reasonably healthy. However a lot were started specifically to be acquired.
As for foreign currency exchange, the vast bulk of Americans are not asking for that and even the banks that offer the “service “ charge outrageous fees for it.
@heliotrophic If you're concerned about maximizing opportunities for local workers at retail banks, large banks have the shared resources to open more branches (creating local jobs). There are also more opportunities at these banks for these employees so that someone who starts as a teller could one day end up in a high-paying corporate position at a financial firm. Large firms are also less prone to local or even regional economic shifts meaning that they can avoid shutting down if something should change in the area (eg. how many local banks/credit unions shut down in Detroit post-2008).
1
20 years ago my wife and I had accounts at the same local bank in Charlottesville, Va. When it was bought our accounts went to different banks and after several intermediate stops along the way we are now at BB&T and SunTrust. So after one more merger we'll be together again at the bank. The glories of American capitalism, the banking system, whatever, they all rob us blind.
1
BB&T has been my NC bank for 20+ years, and as a "regional" entity, BB&T has been personally appealing because it wasn't BofA, Wells, or others. I don't get the impression that the new bank will stray at all toward policies unfriendly to the customers who've been loyal to it, unless, of course it either hires Elizabeth Warren to do its commercials or decides to rebrand itself using an agency who conjures up new prescription drug names for the pharmaceutical industry. Imagine: "Atlantolinabanc: Bringing ten new lanes to Interstate 85."
@JBC large banks spend more money telling customers they love them than actually being good to them.
B of A, Chase, and others yank a ton of fees in the name of “innovation “.
BB and the Sunshine Bank will be no different.
5
At $442 billion in assets, they really wouldn't be that big.
Here are the top banks above them:
JPMorgan Chase & Co. Assets: $2.53 trillion.
Bank of America Corp. Assets: $2.28 trillion.
Wells Fargo & Co. Assets: $1.95 trillion.
Citigroup Inc. Assets: $1.84 trillion.
U.S. Bancorp. Assets: $462.04 billion.
They would compete with these banks primarily in retail and small-to-medium business. The largest banks have a tight lock on corporate finance for the top blue-chip companies.
1
@Jonathan
Good points --
1
It would be nice if there were any indication that larger banks benefit anyone other than the largest investors and some stockholders. If you're a regular person, please consider keeping your money and doing business with your local community bank or credit union. You'll still get the FDIC insurance up to $250,000, but you'll be creating local jobs and keeping your community vibrant. Even my itty-bitty local credit union has mobile check deposit you can do by phone. Let's stop buttering rich people's bread and scraping by to get margarine for our own.
19
@heliotrophic If you're concerned about maximizing opportunities for local workers at retail banks, large banks have the shared resources to open more branches (creating local jobs). There are also more opportunities at these banks for these employees so that someone who starts as a teller could one day end up in a high-paying corporate position at a financial firm. Large firms are also less prone to local or even regional economic shifts meaning that they can avoid shutting down if something should change in the area (eg. how many local banks/credit unions shut down in Detroit post-2008).
1
@Peter: Have you noticed how large banks aren't TRYING not to lay people off, though? They're regularly trying to automate as many people as possible out of jobs and declare others redundant, as is stated in this very article. I don't know -- how many local banks and credit unions shut down in Detroit post-2008? Did big banks rush into serve their customers? Unless you can give me some good sources, I rather doubt it.
10
@Peter
Large banks also have the resources to “settle charges” with big cash payouts to prosecutors when they violate the law. Imagine if I robbed a bank at gunpoint, made off with 3 million, then when caught by the police settled the charges with out admitting guilt by paying 100k and pocketing the rest?
4