Thursday, March 6, 2014

M&T Bank's Little Secret

Authored by Dr. Lachin Hatemi
 Published by

With $80 billion in assets, M&T Bank is one of the biggest regional banks in the United States. Headquartered in Buffalo, New York, M&T Bank is a market leader in Western New York, Pennsylvania and Maryland.

Unlike other major banks, M&T Bank continued to churn out handsome profits for its shareholders despite serving some of the poorest urban markets in the country. Buffalo and Baltimore are two of the United States’ poorest cities, places where poverty and high-crime rates have destroyed communities. Coincidently, both cities – overlooked markets for other financial institutions – are where M&T Bank has the largest market share and made a fortune.

Low-income customers in densely populated urban areas can be surprisingly fertile grounds for a bank to exploit for profits. The dirty secret of the banking industry is the overdraft fee – the infamous $37 penalty, which a bank can levy on your account every single time you overdraw it.
Do not underestimate overdraft fees. It is big business for banks, generating more than $32 billion for the industry in 2013 alone.