Hey, one of you BBT fans who is in good with
shareholder relations, suggest this: BBT issue credit cards
to its share-
holders. I would rather they get
the benefit of my transactions
than others. Seems
to me that would increase business.
and Mobile issue gas cards to their shareholders.
You are right on target regarding the WV eastern
panhandle. Thriving, growing, good demographics, with a good
economic outlook. I suspect this would be an excellent
banking market for BBT, but there really is no "mass"
WV-based bank headquartered there to
..........Stay at the Bavarian Inn in Shepherdstown...on the
cliffs overlooking the Potomac.....good food....terrific
A bonus post...expert opinion on two
First, Y2K..if there are any problems, it will not be
with the banks' internal operations, but rather with
customers. Liquidity is an issue. Remember, a Deposit is a
liablilty and banks must be prepared to pay them at any
time. My favorite Y2K story o date: A couple draws
$14,000 out of the bank, gonna beat the rush, and buries
it in their back yard. It get stolen. What do I say
about that? GOOD! Serves them right!
this whole Y2K problem is classic Chicken
CREDIT CARDS: banks make money off credit cards three
differant ways: Interest, fees, and interchange income. A
bank will pocket about 1.3 to 1.5% of every purchase
made with their credit card, this is called the
interchange (the retailer pays about 3% to handle the
processing, interchange, etc.). As long as you use it, they
will make money. There is not a more profitable
product out there for banks, but because it is unsecured
debt, it is one of the most risky. National chargeoff
stats are around 5%, give or take a little, depending
on the season and regions.
Your ideal credit
card customer, though, is one who charges the
daylights out of it, goes over limit from time to time,
carries a balance, and is constantly late in making his
payments. That way you have them on interchange, interst,
now are building or have built product
profitibility and customer profitibility systems. The ideal is
to have each product profitable, and most customers'
total relationships profitable. You may pay off credit
card, but have deposit/home
equity/trust/insurance/investment/etc. or some combination of services that are
profitable. Profitability analysis systems plus an aggressive
sales effort to wrap up more services per customer is
key to success.
Also, enlightened banks/thrifts
don't try to run off unprofitable customers, but try to
price the services they use adequately.This is basic
business sense that bankers are beginning to catch up
with....if they want to survive.
Senator may be telling Americans to stockpile
supplies for Y2K. Drive the FEAR. The media should not
support the fanaticism. This could easily scare America
into a DEPRESSION. I'm not trying to be a doomsdayer,
but unless the average american's opinion changes and
fear eases, we will have some real problems.
need some people out there making some guarantees.
What would happen if most seniors took all of their
money out of the bank. What would happen if the wrong
person saw them take 100k out. We would have a huge
increase in robbery. multiple problems stemming from
nothing but FEAR
Banks will see Y2K problems- fanatical fears will
cause fundamental banking problems. While visiting my
parents this weekend, my mother showed me a brochure that
a local church has been distributing. This brochure
was a to do list to prepare for the new year.
-take all money out of market and banks- keep this
money in a safe, safety deposit box, or in a hidden
-destroy your credit cards/check books/ etc
on bottled water and canned food
-stock up on
-stock up on heating fuel
THESE ARE THE PROBLEMS THAT MAY
PRESENT THEMESELVES. THE NAIVE, UNCERTAIN, OR ELDERLY
WILL PROBABLY LISTEN TO THIS ADVICE. If zealots are
taken seriously, there will be a huge hit to the entire
economy. Maybe this will help boost comodity prices. Fear
is the problem, and until the fear has subsided-it's
going to be scarrrrry 3-4th qtr this year.
How do bankers, from their profit-motive
standpoint, view those who amass sizable credit card bills
every month, at least four figures, but then pay them
completely and on time every month? Are we "deadbeats?"
There have been several comments regarding Y2K
and banking on this board. With few exceptions, Y2K
is not a factor in the mergers we are seeing. I
recently met with the FDIC and they informed me that only
a handful of banks in the entire country are behind
where they should be.
The banks, and their
regulators, were the first industry to really focus on this
problem. Remdial efforts began in 1997.
banks will not have Y2K problems. Period.
BB&T's share price did not decline after the
purchase of Matewan was announced; instead, both volume
and price jumped dramatically. Because of other
factors, I expected the price to increase yet more, but
the slide in bonds took a bite out of that. I expect
more climb to come. But in the short-term: nobody has
the answers, everybody's the emperor without clothes.