M&T faces brighter spotlight after People deal

M&T Bank has had to navigate choppy political waters over the past month.

M&T has received criticism from elected leaders over problems some Connecticut-based People’s United Bank customers had with converting their accounts to M&T over Labor Day weekend. These executives had also criticized M&T for the scale of the planned job cuts at People’s, stemming from M&T’s $8.3 billion deal for People’s.

Buffalo-based M&T is now in the spotlight, after a deal that expanded its presence throughout the Northeast and boosted its ranking among its peers. And with that higher profile comes more control.

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Connecticut Governor Ned Lamont tweeted a photo of himself meeting with M&T Chairman and CEO Rene Jones in his office.

“Rene acknowledges M&T’s issues and reaffirmed his commitment to getting it right,” Lamont wrote.

The governor added: “I will hold M&T accountable for its commitment to the state, ensuring at least 1,000 jobs are based in Bridgeport while also focusing on investing in underbanked and underserved communities. of Connecticut.”

M&T has also been criticized by Senator Richard Blumenthal of Connecticut and State Attorney General William Tong, who have vowed to keep M&T under close watch. Lamont, Blumenthal and Tong are all up for re-election this year.

Senator Richard Blumenthal

Senator Richard Blumenthal.

AP file

John Wilcox, who teaches economics and finance at SUNY-Buffalo State and follows the banking industry, said there was a political dimension to what M&T faced in Connecticut, especially in light of the cuts. of M&T jobs. Last year, M&T announced plans to cut 747 Connecticut jobs, mostly at what used to be People’s headquarters in Bridgeport.

“There’s this political sting for lawmakers, and there’s the sting for the community,” Wilcox said. “‘It was a big organization (People’s) in our community, and now this bigger organization from outside has come in and taken them over.'”

Elected officials could do little to stop or slow the people’s deal once regulators approved it, he said.

“I think it’s more about getting leverage to make sure M&T delivers on its commitments, which it always does,” he said.

That leverage could take the form of minimizing job cuts by M&T, or attracting more charitable donations or loan commitments for Connecticut from M&T, he said.

Bank mergers, by their nature, are sensitive transactions, given the different groups they affect:

• Employees of the acquired bank, some of whom could lose their jobs due to overlapping roles.

• Customers, who expect a smooth transition of their accounts to a new bank.

• Leaders of the communities served by the acquired bank, who are concerned about the long-term business impact of the deal.

A year ago, M&T announced a five-year, $43 billion loan and investment package that would affect all of its markets, including territories added under the popular deal.

But M&T still faced criticism on two fronts: the way customer accounts were converted and its plans to cut jobs.

M&T acknowledged that some customers encountered issues during the conversion, while seeking to put those issues into perspective. Jones said M&T onboarded nearly a million new People’s customers, with 1.7 million accounts, and complaints the bank received directly or otherwise accounted for 0.6% of converted customers.

Rene F. Jones

René F. Jones, Chairman and CEO of M&T.

Derek Gee/Buffalo News

Jones said there may be other customers who have issues but haven’t officially reported them, but M&T is working to resolve any outstanding issues.

M&T has also agreed to waive certain fees until the end of October for former People’s customers whose accounts have been transferred to M&T, whether or not those customers experience any issues. And the bank was reimbursing customers for late fees incurred if they were temporarily unable to access their accounts.

Wilcox said any customer account conversion issues seemed to fade away after the first wave of attention. The conversion phase is a critical step for banks, he said.

“You want to do it successfully because it keeps people in the loop,” Wilcox said. “You bought a million customers and you want to have them with you. You want to have their deposits with you in a year.

“That’s what you paid for: not just the buildings, not just the employees, but you also paid for the customers,” he said.

On the jobs front, M&T made public its reduction plans in August 2021, well ahead of the scheduled completion date. The elected officials of the time were alarmed by the number of cuts.

The bank said it would prioritize affected People’s employees for other vacancies at M&T. And the bank has pledged to employ at least 1,000 workers within a year of converting systems at M&T’s new regional office in Bridgeport, Connecticut.

Although M&T received strong criticism from elected officials, it was in the bank’s interest not to make matters worse with its responses, Wilcox said. “You want to make this as user-friendly and efficient as possible, and you don’t want to create any enemies along the way.”

Want to know more? Three stories to catch up with you:

• M&T feels more heat over issues People customers had with conversion

• M&T strikes $8.3 billion deal for People’s United

• M&T ready to capitalize on People’s deal


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