Regions Financial and Synovus Financial Look to New Revenue Drivers as Customer Revolt Continues
November 17 2011 - 8:16AM
Marketwired
Amidst a firestorm of customer backlash, US banks of all sizes are
backing off the new monthly fees. Banks began instituting monthly
fees in response to last year's Dodd-Frank legislation that limited
the amount of money banks could charge merchants for individual
transactions. Banks skirted the legislation by charging a flat
monthly fee to use debit cards in order to recoup some of the
losses. The Paragon Report examines investing opportunities in the
Regional Banking Sector and provides equity research on Regions
Financial Corporation (NYSE: RF) and Synovus Financial Corporation
(NYSE: SNV). Access to the full company reports can be found at:
www.paragonreport.com/RF
www.paragonreport.com/SNV
Moving forward, the move to drop monthly debit card transaction
fees will certainly help the public image of regional banks.
However, regional banks can ill afford further revenue stream
losses and need to find new ways to generate capital. Bill
Hardekopf, CEO of LowCards.com, stated that "banks are still losing
billions of dollars in revenue from the interchange fee
regulations."
In addition to charging fees to use debit cards, many banks
added or increased fees for checking accounts and raised amounts
customers must have in those accounts to avoid such fees.
The Paragon Report provides investors with an excellent first
step in their due diligence by providing daily trading ideas, and
consolidating the public information available on them. For more
investment research on the regional banking sector register with us
free at www.paragonreport.com and get exclusive access to our
numerous stock reports and industry newsletters.
Last month Regions Financial said that it is eliminating a $4
monthly fee it had started charging some debit-card customers.
Regions reported third quarter 2011 earnings available to common
shareholders of $101 million, or 8 cents per diluted share, driven
by continued solid business performance and strong expense
management.
Synovus Financial has become somewhat of a turnaround story this
year. The regional bank posted its first quarterly profit in three
years, helped by a steep drop in provisions for bad loans and a big
securities gain.
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