About 10 years ago, Citigroup announced it was coming to metro Boston to take over the banking market and show the local and regional bankers around here how it should be done.
That’s not quite how they worded it, but that was the implication. And a lot of local bankers were rightfully concerned. Citigroup is one of the largest banking companies in the world. They have very deep pockets. Deep enough to open dozens of new branches at once. Deep enough to pay millions & millions for the naming rights for the Wang Center. It was only wise to take notice of their arrival and to keep an eye on them.
And now – about a decade later – Citigroup is pulling up stakes here, closing the retail branches that are still open and essentially leaving town altogether. As they have done recently in Philadelphia and Texas.
So what happened? How did the local banking Davids slay this financial Goliath?
Actually, it never was David versus Goliath. Because local banks never took Citigroup on that way. It was more like the 1953 classic movie “War Of The Worlds”, where the space aliens died when they caught a cold.
As a publicly-traded company, Citigroup has to answer to Wall Street. Every single day, every single quarter, every single year. They have to show increasing profits all the time so they’re always trying new things looking to make growth happen. New initiatives have to prove themselves reasonably quickly. Or the plug gets pulled.
There’s nothing wrong with pulling the plug on under-performing ideas. At all! That’s good business. And Citigroup was right to give the metro Boston market a try, if they thought it could be profitable for them.
Citigroup certainly seemed to think customers would flock to them. Maybe they had convinced themselves that people around here were waiting, wishing and hoping that a Manhattan bank would finally swoop in and … what? Change their lives? Hardly!
Because New England isn’t the backwater Citigroup seems to have imagined. As a region, we have a ton of great local banks. Banks that offer all the same accounts and options as Citigroup. Local banks that customers have been with for years. Local banks that customers know and like.
So, when there was no great rush to Citigroup’s offices by local customers, they decided to pack up and leave. They weren’t interested in making a long-term commitment to this market. Answering to Wall Street, they couldn’t afford to.
I can’t fault their decision to go. It was undoubtedly right for them. But – as a local banker with life-long roots in Canton, metro Boston, Massachusetts and New England – I look at banking differently. A lot differently.
Community banking isn’t a “get rich quick” business or a rocket-to-the-moon growth stock proposition. It’s not supposed to be! Community banking is about making sure local people have a safe place to save and a fair place to borrow. It’s about promoting saving and home ownership.
There are plenty of New England banks that have been serving their local communities for 100 years, 125 years and more. Weathering every storm along with their customers – who also happen to be neighbors and friends. And growing with customers too.
If all banks acted like Citigroup – come in and then beat a retreat back to Manhattan when a quick buck doesn’t materialize – this country would be much the worse for it. Because then many cities and towns would be without a bank.
But it turns out that people around here clearly value having independent local banks. The vote of the customers came in. “Our local banks are doing a great job,” they said. “We trust them. We like them. We’re sticking with them.” And it turns out that’s why Citigroup could make it there but they couldn’t make it here.
Nick Maffeo is the President & CEO of Canton Co-operative Bank in Canton. “Smart About Money” is a regular column he writes for the Canton Citizen. Have a financial question you’d like to ask? Email to info@cantoncoopbank.com.