Publish date:

No Respect for Bricks-and-Mortar Banks

No matter how many online customers they have, banks will always be hostage to rates, Cramer says.

Sometimes these bricks-and-mortar outfits get no breaks whatsoever. Consider the splash that



made when it announced that it had signed up 66,000 clients with its free checking. It got positive articles in a host of newspapers and magazines and got a nice little pop in its stock.

Now consider this:

Bank of America

(BAC) - Get Report

TST Recommends

is signing up more than 100,000 new online customers a month! It has 2 million customers! Heck, if Bank of America were to close its company and start over, it would be worth more as a Net bank!

When I surveyed the offerings that Bank of America has on the Web, I had to admit that I was slighting this bank -- as I have most of the traditional banks -- when I wrote a

piece a few weeks ago that said the banks don't get it.

The banks get it; Bank of America clearly gets it. But the market is not going to give them credit for it because, basically, banks will forever be hostage to rates,

even if they jump up and down and say we are a fee-based, Net-based facility with big venture capital gains.

Nobody ever said the market was fair.

James J. Cramer is manager of a hedge fund and co-founder of At time of publication, his fund had no positions in any stocks mentioned. His fund often buys and sells securities that are the subject of his columns, both before and after the columns are published, and the positions that his fund takes may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column at