Customers Not Impressed With 1stQ Earningsby Tim Manni
Citigroup is the third banking institution to release “better-than-expected” first-quarter earnings this week — but some of their customers, as well as the Treasury Department, are not impressed — frankly they’re concerned.
An accountability report released this week by the Treasury Department revealed that lending amongst the nation’s largest banks declined by six percent in February from the month prior. The Department has become so concerned with the lack of lending amongst TARP banks that it launched a Federal probe to investigate the matter.
In their defense, the 21 banks which received $211 billion in TARP funds have had to juggle the Treasury’s demands to increase consumer lending as well as their capital reserves. At this juncture, many of the banks which received TARP funds are working hard to rid themselves of it. Furthermore, in their defense, demand for loans has also faded. The Fed’s “Beige Book” of regional economic conditions noted that during the time period in which the Treasury reported that lending declined, “Demand for commercial and industrial loans was reported to be lower in most Districts…Consumer loan demand also fell in general…” If there are fewer borrowers, how are banks supposed to maintain lending, let alone increase it?
That being said, many bank customers still feel that TARP repayment efforts have become a priority over their immediate concerns. The latest increases in credit card rates and fees, as well as banks’ lackluster interest (so far) in Washington’s latest housing initiatives, has proven to some that banks are more concerned about themselves than their customers. One of our readers commented:
“I can’t speak for the other banks, but I can say that Chase is not interested in “helping” their customers. In fact, just the opposite. They are trying to push them over the edge.”
Readers: Is your bank more concerned with their immediate interests or your own? Are you a credit-quality borrower and still been turned away?