10 Bankers to Watch in 2016
December 14, 2015 11:00 AM
Some are on the hot seat. Others are replacing legends or overseeing make-or-break initiatives from big mergers to product expansions to tech overhauls. These are the bankers to keep an eye on in the new year.
Beth Mooney, KeyCorp
Under Chairman and Chief Executive Beth Mooney, KeyCorp has been skillfully cutting expenses while also expanding into new business lines and investing in technology . But can the Cleveland company maintain its momentum following its acquisition of the $39 billion-asset First Niagara Financial Group? While the deal significantly boosts Key's market share in upstate New York and moves it into attractive markets in Pennsylvania, Connecticut and Massachusetts, investors were spooked by the price (1.7 times tangible book value) and an anticipated 12% reduction to book value that some observers say will take 10 years to recover. Bank investor and blogger Tom Brown was especially critical, calling the deal "a ticking time bomb of value destruction on par with some of the classic bank mashups of the late 1990s." Expect Mooney to spend considerable time in 2016 trying to prove the doubters wrong.
Greg Carmichael, Fifth Third Bancorp
Speaking of big Ohio banks, the $139 billion-asset Fifth Third is undergoing a transition of its own. Its CEO, Kevin Kabat retired in November and has been replaced by Greg Carmichael , a former information-technology executive who has been the bank's chief operating officer since 2006. While Kabat has won high praise for expertly steering Cincinnati-based Fifth Third through the financial crisis and, more recently, acting decisively on where and how to cut costs, investors have been frustrated of late by the company's lackluster revenue growth. Finding new revenue streams through product development, acquisitions or otherwise will be among Carmichael's big challenges in 2016.
Kenneth Chenault, American Express
American Express has been among the worst-performing stocks in the Dow Jones Industrial Average this year and that's prompted speculation that Chairman and CEO Kenneth Chenault's job is in jeopardy. Though it has generally been hitting its profit numbers, Amex has struggled to grow top-line revenues, particularly after Amex lost its exclusive partnership with retail giant Costco . Further fueling speculation that Chenault may be on the hot seat is that the activist hedge fund ValueAct Capital Management invested roughly $1 billion in the payments giant over the summer. ValueAct is known for forcing change at companies in which it invests. Amex's future success and Chenault's job could hinge largely on the firm's big bets on mobile payments .
Ellen Alemany, CIT Group
Alemany's primary job will be leading CIT's transition from specialty lender to mainstream commercial bank. That means shedding noncore assets CIT recently put its commercial air business, as well as lending operations in China and Canada up for sale and increasing CIT's focus on middle-market and small-business customers in the U.S. It's a tall order, but Vice Admiral John Ryan, CIT's lead director, has great confidence in Alemany's ability to execute. "As an experienced and well-respected leader in the commercial banking sector, she is well-suited to assume these responsibilities and lead CIT forward," he said.
Jeffrey Brown, Diane Morais, Ally Financial
Ally Bank is good at gathering deposits to fund the car loans that its parent company, Ally Financial, specializes in. But Jeffrey Brown, who took over as Ally Financial's CEO earlier this year, says becoming a truly "great" bank requires offering more loan products and cross-selling them to its loyal base of depositors. Key to that effort will be Diane Morais , who was promoted from deposits executive to president and CEO of the bank unit in June. Look for the first of the new loan products to roll out in the first quarter.
Craig Dahl, TCF Financial
Craig Dahl has some big shoes to fill in replacing William Cooper as CEO of TCF Financial in Wayzata, Minn. Save for a short-lived retirement in 2006 and 2007 Cooper has been the very public face of the $20 billion-asset TCF for three decades, not to mention one of the industry's most vocal critics of regulation. Cooper is not going away he will remain nonexecutive chairman but all eyes will now be on Dahl as he aims to build on Cooper's largely successful effort to transform TCF into a leading automobile and specialty lender. Still, Dahl will face some big challenges in the early going. TCF ranks last among Midwest banks in customer satisfaction, according to J.D. Power, in part because customers often feel blindsided by its overdraft fees. Meanwhile, the Consumer Financial Protection Bureau is threatening the bank with an enforcement action if it does not improve its opt-in policies for overdraft protection. Regaining the trust of depositors and staying on the CFPB's good side will be obvious priorities for Dahl.
Phillip Green, Cullen/Frost Bankers
Like Dahl, Cullen/Frost's Phillip Green has been tapped to replace his longtime boss as CEO. Green, who was the San Antonio company's chief financial officer for 20 years before being named president in early 2015, will take over as chairman and CEO on April 1, following the retirement of Dick Evans. Perhaps his biggest immediate challenge will be keeping losses on loans to oil and gas firms to a minimum. The $28.3 billion-asset company has done that under Evans, but until energy prices rebound, Green can expect a steady diet of energy-related questions from analysts and investors. Long-term, investors will be counting on Green to maintain Cullen/Frost's pace of growth its assets are growing at an average of roughly 10% a year while safeguarding its stellar credit quality.
Niti Badarinath, BMO Financial
BMO Financial has big growth ambitions in the United States and it's looking to Niti Badarinath to help it reach its goals. In November, the Toronto-based parent of Bank of Montreal and Chicago-based BMO Harris named Badarinath its head of North American channels, overseeing its online, mobile and branch operations. Badarinath joined BMO from U.S. Bancorp , where he had been senior vice president of mobile banking and money movement. Under Badarinath, U.S. Bancorp was seen as such a as a leader in mobile innovation it was one of the first banks to roll out mobile photo bill payments, for example that American Banker named him its Digital Banker of the Year in 2014. In the newly created post at BMO Harris, Badarinath will direct the company's digital strategy in Canada, where it is the fourth-largest bank by assets, and the U.S., where it ranks in the top 25 but still wants to substantially boost market share. Its goal is to double its number of customers here, to 6 million, within five years.
Gene Taylor, Capital Bank Financial
Capital Bank Financial's latest roll-up will push the Coral Gables, Fla., bank ever closer to the $10 billion-asset mark that CEO Gene Taylor and other executives have said they are in no rush to cross. In late November, the bank announced that it is buying Charlotte, N.C.-based CommunityOne Bancorp in a deal that would boost its assets to $9.6 billion. For now, the company says it can delay crossing the $10 billion-asset threshold which would trigger stress tests and caps on interchange fees for perhaps as long as two years by shedding certain loans and investment securities. Then again, if the right deal comes along, Capital, founded in 2010 to acquire small banks, might just go for it. Florida and Tennessee are two states where the company is eager to expand.
Mike Cagney, Social Finance
In the increasingly crowded field of marketplace lending, Social Finance, or SoFi, has emerged as one the industry's darlings. The online lender was founded in 2011 to refinance student loans of college graduates with high earning potential and now CEO Mike Cagney and his team are aiming to disrupt the broader consumer lending market by cross-selling mortgages and personal loan products to its base of borrowers. Next on SoFi's agenda: figuring out how to offer deposit products in a way that satisfies regulators and mimics the feeling of security offered by a federally insured bank account. Tech investors and venture capitalists love the company's strategy, as evidenced by the $1.2 billion SoFi raised in 2015. Keeping the momentum going in a sector that seems ripe for a shakeout will be Cagney's big test in 2016.
