Dodgy Claims?
Tom Montag, president of global banking and markets at Bank of America Corp., wants to be clear about one thing: he pays his taxes.
The executive was giving a presentation at the bank's investor day conference at the Plaza Hotel in New York on Tuesday when he was abruptly interrupted by a heckler, who shouted from the back of the ballroom, "Bank of America, pay your taxes! … Bank of America is a tax dodger!"
"I actually do pay my taxes," Montag said, without missing a beat, after the unidentified man darted from the room.
Later, after he was finished going through his slides, Montag said he would answer any questions investors had, except about taxes. He deferred those to "our tax-paying CFO" Chuck Noski, who was slated to give the next presentation.
When Noski got to the podium, he reassured the 300 or so investors and analysts gathered that the bank indeed pays its taxes. "In the past 10 years, we've paid $43 billion in income taxes globally, including $38 billion to $40 billion in the U.S.," he said.
All in all, B of A got off fairly easy, considering it was the bank's first such event for investors in four years. However, Chief Executive Brian Moynihan and his team may be opening themselves up to more frequent critical outbursts. Moynihan told reporters Tuesday that he would likely host an investor day conference once a year.
No Bones About It
It's like taking candy from a baby.
On Thursday, U.S. Bancorp CEO Richard Davis told an audience at Citigroup Inc.'s financial services conference that the bank's size has become one of its biggest assets in local markets.
"Just a couple of years ago, you might well have said to me, 'How do you compete with the very strong local community bank that has the name of the city in their name, First National of That Place?' And a couple of years ago, it was harder than it is today, because the community banks, as you know, are the ones that are struggling the most.
"And even the most visceral loyalists in these communities, if the bank doesn't look strong, they're moving to a stronger company.
"So this is our moment. And we thank God we waited it out."
What the WFB …?
When the Federal Deposit Insurance Corp. fined the bank affiliate of outdoors merchandiser Cabela's Inc. for unfair and deceptive practices, failure to live up to its grand name was not among the allegations.
It is, after all, "World's Foremost Bank" — a claim that rings hollow after reading its settlement with the FDIC. Among the practices the bank agreed to stop are setting minimum payments at levels that incur late fees, fining borrowers for payments delayed by holidays and making debt collection calls to customers' workplaces despite requests from them and their employers to stop.
Retail practice consent decrees are hardly unheard of in the industry, and the Sydney, Neb., company's $10 million penalty was cheaper than analysts had expected. Still, it's understandable that the company got some bad press after the FDIC's announcement. The disconnect was akin to a rash of food poisoning cases tied to a restaurant called "Tasty Delicious Diner," or a guy wearing a "World's Best Dad" T-shirt being arraigned for nonpayment of child support.
Back in Shape
Citigroup Inc. is sponsoring the 2012 U.S. Olympic and Paralympic teams as big banks get back into sports marketing, an area many of them pulled back from during the downturn.
The New York financial giant said in a press release Thursday that it has become the "official bank sponsor" of the U.S. Olympic Committee through 2012. Citigroup ads run will run during the NBC broadcasts of the Olympic games, and there will be other Citigroup promotions online and at the events.
Sponsorship is "one way we can show appreciation for the support of the American people," Citi CEO Vikram Pandit said in the release.
The deal comes as Citigroup has been spending more money on its business and its image, and banks become more involved in sports marketing after cutting back to save money. Citi and other institutions like Bank of America — which ended its Olympic sponsorship deal in 2009 — took flak for their sponsorships after accepting bailout money.
There has been less static around their latest efforts now that the companies have repaid their bailouts: Citigroup sponsored last year's Ryder Cup and also became an official sponsor of the professional Women's soccer league. Bank of America hired a new head of sports marketing last year, whose first deal involved renewing its sponsorship of a NASCAR race in North Carolina.
