We used to take banks for granted as places to store our money, and sometimes we borrowed money from them as well. But recently it has looked like banks were getting tired of those boring and unprofitable tasks.
The dismal interest rates they offered for our savings didn’t offer much competitive excitement. The increasing role that robotic ATMs play in our daily lives didn’t provide relationships with consumers. Or perhaps you’ve had a frustrating run-in with a “Relationship Manager,” trying to sell you a “financial product” you didn’t need or want? This is all in dramatic contrast to the exuberance with which banks offered money to those without assets a few years ago, loans and mortgages they could then securitize and sell to investors. You had to wonder what business they thought they are in.
Such thoughts recently occurred to Richard X. Bove, a well-known bank analyst, reflecting on the poor service to be had received at his local bank: “catering to customers may actually distract from the pursuit of making money in the new world of finance. What really matters, he now believes, is pushing products and managing risk.”
“I’m struck by the fact that the service is so bad, and yet the company is so good,” said Mr. Bove. In other words, you might well consider investing in a bank you would never want to patronize. As reported in The New York Times, “Mr. Bove upgraded his recommendation on Wells Fargo stock to a buy last year at about the same time that he began to move his personal bank accounts to a nearby JPMorgan Chase.”