Wal-Mart (NYSE:WMT),the world's largest retailer, has changed it plans and decided to withdraw its application to open a specialty bank, according to news released by The U.S. Federal Deposit Insurance Corp.
In 2005, Wal-Mart, to save money, filed an application with the FDIC to open a bank to internalize credit card and check transactions. This action by Wal-Mart drew immense opposition from community banks.
FDIC Chairman Sheila Bair said in a statement:
Wal-Mart made a wise choice. This decision will remove the controversy surrounding their intentions. [....] They don't need an ILC to play an important role in expanding access to financial services by partnering with banks and others.
I personally feel that Wal-Mart is better off concentrating on what they do best rather than entering ever changing world of banking and finance. Many great companies went this route and learned this lesson in a hard way.
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Disclosure: Author has no position in WMT.