Don’t expect Regions Financial to make a bank acquisition anytime soon.
Speaking Wednesday at an investor conference in New York, Regions President and CEO John Turner ruled out the possibility of acquiring another bank, saying that sellers’ asking prices are too high and that a deal would distract the $125 billion-asset company from its priorities of improving efficiency and returning capital to shareholders.
“M&A is disruptive, M&A is challenging,” said Turner, who replaced Grayson Hall as CEO in July. “Today the economics don’t favor banks our size acquiring other banks, given where banks we might acquire trade. So we’re not interested in bank M&A. Our focus has got to be on how we continue to improve our operations.”
Still, Turner was quick to add that Regions would be interested in a nonbank acquisition, especially one that could help boost fee income. Equipment finance, wealth management and mortgage servicing are all areas where the bank would consider acquisitions, Turner said.
The company has also been focused on its improvement initiative, “Simplify and Grow,” which it announced in the fall of 2017. That program involves a mix of structural reorganization, expense cuts and investments in technology and “has already produced some significant results,” Turner said at the conference, which was hosted by Goldman Sachs.
For example, Regions has eliminated about 1,500 full-time positions in the past year. It has also eliminated some of the functions performed in its branches, freeing up roughly 500,000 employee hours, and cut out about 5 million pieces of paper from its branch operations.
Regions has also improved its loan application processes for both consumer and commercial loans, Turner said, noting that approval times on commercial loans have been reduced from an average of nine days to two.
The Birmingham, Ala., company’s tech investments largely fall into four categories, he said. First are improvements to customer-facing applications, such as mobile banking and payments. Regions is also investing heavily in data and analytics, both to improve its marketing to customers and to help call center employees.
Its third main area of tech investment is in artificial intelligence, which it has deployed in its compliance functions and at its call center.
Finally, the company is investing in improvements to its core systems, including cloud computing and application program interfaces.
