Tayfun Tuzun didn't get much time to settle into his new role as chief financial officer at Fifth Third Bancorp (FITB) within 48 hours he was speaking on the company's behalf at an investor conference.
Still, the appearance is likely one of the easier assignments the native of Turkey will face in coming weeks. The Cincinnati company is financially sound, but its top financial post has been a source of uncertainty of late. It is also a role with high turnover; Tuzun is Fifth Third's
Tuzun replaced Daniel Poston, who was reassigned as part of an agreement with the Securities and Exchange Commission. The SEC, which is investigating how Fifth Third
On top of the typical demands of overseeing the financial dealings of a $123 billion-asset regional, Tuzun must also navigate challenges that include low interest rates, high regulatory pressure and weak revenue growth.
Given all that, Tuzun had nothing to fear about his Nov. 7 presentation at the BancAnalysts Association of Boston Conference, says Kevin Kabat, Fifth Third's vice chairman and chief executive.
"Tayfun has accompanied me on a number of occasions to these analyst meetings, so I was entirely comfortable with his ability to handle them," Kabat says.
Tuzun declined to discuss the SEC's probe or the settlement that was disclosed on Nov. 5. But he admitted that his ascent from the treasurer's post has come amid unusual circumstances.
"We don't think it's a crisis situation," Tuzun says. "It's clearly a difficult situation."
Tuzun's route to the top financial post at was anything but ordinary. A native of Istanbul, he graduated from Bosphorus University with a degree in economics. His parents and brother still live in Istanbul and Tuzun and his family regularly visit Turkey.
In 1996, Tuzun enrolled at Ohio State University, where he obtained a doctorate in economics. He later taught at the University of New South Wales in Sydney, Australia. But the academic life wasn't the best fit, so he left after just a year.
Back in the United States, Tuzun worked for 11 years at Provident Bank in Cincinnati, until it was bought in 2005 by National City, which is now part of PNC Financial. After a short stint at a hedge fund, Tuzun joined Fifth Third in 2007 as a structured finance manager.
Securing the CFO job fulfilled a longtime career goal. "All my career, I've been within the finance group," Tuzun says.
"Clearly I've been more treasury focused, but [CFO responsibilities] are not totally unfamiliar and I had done some of these CFO functions before," he adds. "It's not like I have no clue what the tax manager or investor relations guys are working on."
Poston, who is now chief strategy and administrative officer, "enabled his direct reports to directly engage with him in what they do [and] help him execute his vision and he was very open in terms of running the team," Tuzun says.
Tuzun will be able to handle anything that's thrown at him, says Christopher Carey, CFO at City National (CYN) in Los Angeles.
"I would have loved to have him [work for City National] but he was never really interested in coming out to the West Coast," says Carey, who worked with Tuzun at Provident. "Fifth Third is lucky to have that kind of talent on their bench."
Tuzun will need to tap every reserve of his talent, because the CFO role is perhaps harder now than it's ever been, says Michael Mayo, an analyst at CLSA.
"Investors have increased their scrutiny of management, but the bigger issue now is appeasing the regulators in the Big Brother banking regulatory environment," Mayo says. "There's a tighter leash, not only for the CFO at Fifth Third, but for industry management more generally."
The SEC probe shows the level of regulatory scrutiny that banks are facing. As part of its settlement, Fifth Third agreed to give its consent to the SEC's finding that the company "did not properly account for a portion of its commercial real estate loan portfolio."
The SEC had been looking into whether Fifth Third wrongly classified some of its commercial real estate loans. Specifically, the agency is trying to determine if the loans should have been classified as held-for-sale in the third quarter of 2008, instead of the subsequent quarter.
Fifth Third will be assessed a civil money penalty. Although Fifth Third has not disclosed the penalty's amount, the company said in a press release that it believes it's "appropriately reserved with respect to the proposed settlement."
Fifth Third will not admit or deny the factual allegations made by the SEC. The SEC's five commissioners must still approve the settlement agreement.
Analysts have expressed relief, noting that the settlement removes a large unknown. Fifth Third resolved the issue "in a way that we consider very manageable," says Scott Siefers, an analyst at Sandler O'Neill.
Rather than worrying about an SEC investigation, Tuzun says his most immediate challenge is yearly stress-testing under the Comprehensive Capital Analysis and Review process. He will also prepare for a January presentation tied to the company's fourth-quarter earnings.
Ultimately, Tuzun expects the biggest change to becoming CFO is that many hands-on activities are delegated to others so he can devote more time to making decisions and having in-person meetings with investors and bank managers.
"You don't work with a spreadsheet anymore. You don't do slide shows anymore," Tuzun says. "There is a lot of good coming from talking to people outside."
