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Huntington Bancshares CEO Stephen Steinour is challenging rivals to double down on free checking or abandon it. The bet's simple: less revenue now for more customers later.
May 9
Huntington Bancshares Inc. said Tuesday its no-new-fee strategy is paying off in higher revenue, more depositors and increased cross-sales.
It released a progress report on a program it began in September that gives customers an extra day to make a deposit to avoid overdraft charges. The percentage of checking account holders that buy at least four products has risen to 70.5% from 68.5% since then. It added households with at least one checking account at an annualized rate of 9.1% in the first quarter, higher than the 7.5% rate it had initially projected.
Consumer revenue gains from the program have offset the lost fees on deposit products as well as costs from new consumer protection regulations, Huntington said.
"There was a fork in the road and most of our industry went right, and we went sharply in the other direction, really, to be more customer-friendly, simple, transparent and fair. And we're being rewarded for it," Mary Navarro, the Columbus, Ohio company's retail and business banking director, said at the UBS Global Financial Services Conference in New York.
Huntington on Monday unveiled "asterisk-free checking" accounts, which are free to open, and have no monthly maintenance fee, minimum balance or rules governing check or debit card use.
