Anti-Fee Activist Predicts Years-Long Fight
SACRAMENTO, Calif. - A leader of the fight against ATM surcharges in California predicted Friday that the movement to ban such fees would succeed more quickly in individual cities and states than on the national level, where legislation has been proposed in Congress.Jon Golinger, consumer program director for the California Public Interest Research Group, said he does not see Congress taking quick action on the anti-surcharge bills introduced recently by Reps. Maxine Waters, D-Calif., and Bernard Sanders, Independent-Vt. Congress will be "the final battleground," Mr. Golinger said, but it's likely to "take quite some time to get there."
Mr. Golinger, who was instrumental in the drive for approval of a ban in San Francisco, said it took a year to get an ordinance passed by voters there. Last Monday, a judge temporarily restrained enforcement of the ordinance but required banks to put in escrow the ATM surcharges they collect until the dispute is resolved.
"This is a long battle, and I think most of the cities that are interested will take three to six months, maybe even a year to do it," Mr. Golinger said Friday. Consumers around the country should not expect "overnight" relief.
Also on Friday, David Bartone, a Washington, D.C., lawyer with expertise in ATM fee cases, predicted widening national skirmishes over the matter would "inevitably" be decided in the U.S. Supreme Court.
- Helen Stock
Largest Canadian Bank to Cut 6,000 Jobs
TORONTO - Royal Bank of Canada, the nation's biggest bank, said Friday that it will cut up to 6,000 jobs in the next two years.It announced the job cuts as it reported that its fiscal fourth-quarter profit rose 11% on higher trading and underwriting revenue but that it had failed to meet its target of 4% to 7% annual growth in earnings per share. Chairman and chief executive John Cleghorn also said the bank failed to slow spending, which grew 9% in 1999, exceeding revenue growth of 7%.
Royal Bank said it spent more to expand its Internet banking subsidiary, Security First Network Bank, and its investment banking and brokerage services in the United States.
Mr. Cleghorn set an earnings per share growth target of 12% to 14% for fiscal 2000. He also wants to achieve a return on equity of 17% to 20% and an efficiency ratio, or costs as a percentage of revenues, of 59.5%. The bank's current ratio is 65.2%, excluding one-time revenue and expenses.
Royal Bank's annual return on equity was 16.6%, down from 18.5% in 1998.
Fed Backs Plans of Georgia, Austrian Banks
WASHINGTON - The Federal Reserve Board granted approval late Thursday for the lead Georgia bank of Atlanta-based SunTrust Banks Inc. to merge with the company's 26 other subsidiary banks, including Crestar Bank, in five states.The consolidation may take place after Dec. 15. It will affect Alabama, Florida, Georgia, Tennessee, and Virginia, which all allow for interstate mergers. As of Sept. 30, $92.8 billion-asset SunTrust was the ninth-largest banking company in the country.
Separately, the Fed also gave permission for Austria's largest bank, Bank Austria Aktiengesellschaft, to open a branch in Greenwich, Conn., and representative offices in Atlanta and San Francisco. The bank has $130 billion of assets.
Salomon Hires 4 Execs from Deutsche Unit
NEW YORK - Citigroup's Salomon Smith Barney said Friday it had hired four executives from Deutsche Banc Alex. Brown's private finance group.Loren Boston has joined as a managing director and head of Salomon's New York-based private equity fund group. Neil Banta rejoined Salomon, which he left in 1993, as a director. Tina Courpas is now vice president, and Carolyn Choi a financial analyst.
In addition to these four hirings, Salomon brought in Josh Lerner and Paul Gompers, both of Harvard Business School, to work with the private equity group.