With the credit crunch affecting big banks' bottom line, some banks are taking different tacks to cut costs.
It seems Citigroup Inc. has found a silver lining in the credit crunch. Slate Moneybox columnist Daniel Gross noted that just as the credit crunch threatened Citi's earnings, the company happened to announce an initiative to go green by cutting its energy costs. Buried deep in a Sept. 15 column entitled "The Greening of Hype" was the following gem about Citi:
The Wall Street Journal recently profiled Citigroup's efforts to save $100 million on energy costs. Among the measures: turning off escalators and a failed effort to crank up the heat in a Tampa office from 72 to 78. (It failed because sweltering employees revolted.) Citigroup is going through one of its periodic dark nights of the soul. The giant bank is on the hook for billions of loans to private equity deals, and its stock sits at April 2000 levels. Were Citigroup to trumpet loudly its efforts to improve the bottom line by jacking up ATM fees, it would be pilloried. But when an unloved Fortune 500 company turns the office into a sweatbox, it is hailed as a planetary savior.
Citi's not the only big bank on the hook, so is Bank of America Corp., which chose Gross' other option to improve the bottom line: jacking ATM fees.
Bank of America, which operates the largest U.S. network of ATMs with 17,700 locations, recently hiked ATM fees 50% from $2 to $3. The announcement lacked the fanfare of Citi's green effort because as Gross noted the bank would be pilloried for the effort. Indeed, bloggers responded with vitriol to the news — for examples see BloggingStocks and Salon. —Matthew Wurtzel
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