Mellon sells banks for $2.1B
Competition for thousands of retail-banking customers in western Pennsylvania heated up Tuesday, when Mellon Financial Corp. announced the sale of Mellon Bank for $2.1 billion in cash.
Other well-established Pittsburgh-area banks began gearing up to take on the newcomer as soon as Mellon Financial disclosed the sale to Citizens Financial Corp. of Rhode Island.
The Pittsburgh Tribune-Review reported the sale July 6.
'This is a tremendous opportunity to grow our business and welcome new customers to PNC,' said James E. Rohr, chairman and chief executive of PNC Financial Services Group. 'Mellon's surprising decision to end a 130-year tradition of serving certain customers is a significant event that changes the banking landscape of our communities.'
PNC Bank, the consumer bank of PNC Financial, is Pennsylvania's largest bank. Rohr said PNC captured $1 billion in deposits in Philadelphia after First Union Corp. acquired CoreStates Bank three years ago.
'(We) proved our ability to win business during times of market turmoil. I know our employees are excited to welcome Mellon customers to PNC,' Rohr said.
Dollar Bank also fired a competitive salvo at Citizens Financial in a full-page advertisement appearing in local newspapers today.
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Comparing banking fees (14K) |
Here's a comparison of selected banking fees charged by Pittsburgh area banks and by Citizens Bank of Massachusetts, whose parent Citizens Financial Group is buying Mellon Bank.
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Mellon Financial said it is selling 345 Mellon branches, including 120 in the Pittsburgh region. That will make Citizens Financial the state's third-largest bank.
Citizens Financial is a unit of the Royal Bank of Scotland. It has 427 branches in Massachusetts, Rhode Island, Connecticut and New Hampshire. It also operates 835 automated teller machines in New England.
The deal includes Mellon's 638 automated teller machines. That will give Citizens 1,473 cash machines.
At a news conference yesterday, Citizens Financial Chairman and Chief Executive Lawrence K. Fish stressed that consumers can expect quality service at a reasonable price - a complaint registered by some Mellon customers in the past.
Fish said Citizens Bank is 'thrilled' at the prospect of adding about 650,000 household customers of Mellon to its customer base of 1.3 million households.
'They are going to find exciting products, and they're going to find the same friendly faces that were there yesterday,' Fish said.
Mellon branches will convert to Citizens sometime next year. Fish also hinted at 'good news' about fees, but declined to be specific.
'We'll return your phone calls,' Fish said. 'We'll also look you in the face and say 'thank you,' and maybe even remember your name.'
'The name will change and the marketing will change,' Fish said. 'And we look forward to introducing Pennsylvania to the successful history we have in retail banking.'
The sale of Mellon Bank generated little emotion on the streets of Downtown yesterday.
'As long as the new bank's service is the same, I guess that is OK with me,' said Wallis Hardie, who moved to Pittsburgh seven months ago from Flagstaff, Ariz.
Hardie, administrative assistant at Planned Parenthood, said she had heard of the Mellon family but was unaware of Mellon Bank until she moved here.
For Brett Imler, a cooking student at Pittsburgh's International Culinary Institute, Mellon was the obvious place to open a bank account.
'These banks are all over Pittsburgh, and that is easy for me,' said Imler, at Three Mellon Center, Downtown, just after he opened an account.
Citizens Financial also announced the creation of a $35 million foundation 'to enable Citizens to invest deeply in Pennsylvania communities,' Fish said at Mellon Financial's headquarters Downtown.
'We're going to be active in the support of communities of color and communities of need,' he said.
The unnamed foundation also would fund the arts, medical sciences, and women's and children's causes, he said.
Fish said Citizens' employees would be encouraged to volunteer for local charities and that its executives would vie for leadership roles on local boards and fund-raising events.
That commitment was welcomed by community organizations.
'We are taking the position of wait and see,' said Jacqueline Hill, executive director of the Pittsburgh Community Reinvestment Group.
The group has entered into agreements with 13 financial institutions, including Mellon, to provide for access to banking facilities as well as business and mortgage loan opportunities for low-income residents.
'We are concerned because Mellon has sold off their mortgage division, and now the retail banks, we're concerned that citizens in our various neighborhoods would be left with predatory lending institutions and not be able to get mortgage loans,' Hill said.
And no, the Pittsburgh Penguins home is not going to get a new name. It will remain Mellon Arena, said Mellon Chairman Martin McGuinn.
'Our plan is to continue in support of Mellon Arena,' McGuinn said, 'and to continue with our support of this community as we have a long tradition of doing.'