Texas-headquartered financial holdings company
International Bancshares (IBC) plans to close 55 of its smaller
in-store branches located in grocery shops in response to new
federal rules that cap the fees banks can charge retailers for
debit card transactions.
IBC has said that they are taking this action
to align IBC’s expenses with the reduced levels of revenue, in
order to maintain IBC’s free products program
Go deeper with GlobalData
“In reaction to these new requirements that
limit these fees, other banks have already cut their free offerings
and rewards programs, but IBC is committed at this time to keeping
free products and services because that is what our customers
want,” said Dennis Nixon, IBC chairman and CEO.
The revenue from debit card fees – that retailers pay whenever a
customer makes a payment at a store using a debit card – has been
an important source of income for banks. But the Durbin Amendment
that comes into effect on October 1 has put limitations on that fee
and forced many big banks in the US to plan cutbacks on services
such as rewards programs and free current accounts.
Chase, PNC Bank, Wells Fargo and SunTrust bank are some of the big
lenders that have cut back or eliminated their debit rewards
programs due to the new regulation.
Well Fargo, for instance, plans to charge a fee of $3 per
month for debit card users in five US states October
onwards.
The shut down of 55 IBC in-store branches
will result in the elimination of approximately 500 permanent jobs
associated with these branches.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataNixon said, “Our customers have always made it
clear to us that free products and services are extremely important
to them. To keep those free offerings in place, we will have to
reduce expenses.”
Over the next three months, IBC employees will
be reduced by attrition or absorbed in other branches.
Reducing expenses by closing branches instead
of eliminating IBC’s free products and services for current
accounts is what customers wanted and IBC is just “responding to
that recommendation” said Nixon.
“We want to remind our customers that in
addition to our strong network of 219 remaining branches, they can
continue to access their accounts through IBC debit cards, IBC
Voice, IBC bank online, IBC bill pay, IBC mobile banking, direct
deposit services, and our network of over 375 IBC ATMs,” Nixon
added.
IBC’s four bank subsidiaries provide commercial and retail
banking services through 275 main banking and branch facilities and
440 ATMs. IBC, with $11.8 billion in assets, has operations in
Texas and Oklahoma.
