10 to Watch in 2017

December 13, 2016 10:00 AM

Some are replacing legends, others are overseeing major mergers or product launches, and at least one big-bank CEO is on the hot seat. These are the industry executives to keep an eye on in the new year.

Tim Sloan, President and CEO, Wells Fargo

Is any banker more on the hot seat than Wells Fargo's Tim Sloan? When John Stumpf stepped down as CEO in October in the wake of the notorious phony-accounts scandal, many industry watchers believed Wells needed to bring in an outsider to fix the damage. Instead, the board handed the job to Sloan, a 29-year Wells veteran who had previously been tabbed as Stumpf's heir apparent. Sloan can prove the naysayers wrong if he can quickly restore trust with customers and regulators while proving to investors that Wells can still generate industry-leading profits even as it shifts from a sales-oriented culture to one that's more focused on customer service. But it's a tall order, and if Sloan stumbles at all, Wells could once again face pressure to bring in fresh blood.

Related: Can Tim Sloan Fix Wells Fargo?

Mary Mack, Head of Community Banking, Wells Fargo

Sloan's job may be on the line, but it's one of his direct reports, Mary Mack, who The Wall Street Journal said "arguably has the hardest job in banking." Mack is the new head of the embattled community banking unit, and apart from the dealing with the typical retail-banking challenges too many branches and too little foot traffic she has the added burden of trying to reverse the steep decline in new consumer checking and credit card accounts since the scandal broke in early September. Boosting employee morale in the wake of the scandal is also a top priority. Mack has traveled to dozens of markets in recent months to meet with front-line staffers, and she is in the midst of devising a new compensation structure for retail bankers following the company's decision to eliminate sales goals.

Ralph Babb, Chairman and CEO, Comerica

What a wild ride it has been for Dallas-based Comerica in 2016. Its first quarter was dismal, as falling oil and gas prices forced the $72 billion-asset bank to massively boost reserves on loans to energy firms, and its profits and stock price suffered as a result. On its first-quarter earnings call, CEO Ralph Babb said that all options for improving returns were on the table, including exiting markets or business lines or even selling the bank outright. How things have changed since then. Credit quality has improved substantially as energy prices have stabilized and its profits are once again rising, buoyed by an aggressive cost-cutting program that Babb says will reduce expenses by $150 million in 2017. Meanwhile, its stock has rebounded to become the best-performing regional bank stock this year, according to Sandler O'Neill. Drastic measures appear to be off the table for now, but keeping up the momentum particularly if oil prices plunge again will be Babb's big test in 2017.

Cort O'Haver, President and CEO, Umpqua Holdings

Talk about a tough act to follow. For the past 22 years, few bank CEOs have been as closely linked to their banks as Umpqua Bank's Ray Davis. He not only transformed what had been a tiny, five-branch operation into the largest bank in the Pacific Northwest, he redefined how banks serve their customers and, in doing so, built Portland, Ore.-based Umpqua into one of industry's most-admired brands. Now Davis is transitioning to a new role as head of the bank's innovation lab, and taking his place is Cort O'Haver, Umpqua's president and former head of commercial banking. The $24 billion-asset Umpqua is best known for its retail-banking prowess, but O'Haver has been instrumental in building its commercial capabilities, and as CEO he will look to build on that progress. Investors will also be looking to O'Haver to boost Umpqua's returns, which have lagged peers in recent years due in part to costs tied to the bank's 2014 acquisition of Sterling Financial.

Rajinder Singh, President and CEO, BankUnited

Another longtime CEO calling it quits this year is BankUnited's John Kanas. He is stepping down on Jan. 1 and will hand the reins to Rajinder Singh, BankUnited's chief operating officer since 2010. The move was surprising in some ways because BankUnited has put itself on the block before, and many observers had assumed that Kanas' exit strategy would be a sale of the Miami Lakes, Fla. bank. A sale could still happen; Singh has a private-equity background, and he recently said that his interests are very much aligned with those of shareholders. But for now his focus will be on expansion. BankUnited bought a bank in New York in 2013, and it now has more loans there than it does in its home state. In 2015 it bought the small-business lending arm of the former CertusHoldings and recently expanded its operations into three new states: Ohio, Wisconsin and Washington. "I don't want BankUnited to be a one-trick pony," he told American Banker in September. "I don't want us to be limited to doing one or two things."

Charlie Scharf, former CEO, Visa

Charlie Scharf may soon be the hottest free agent in financial services. Scharf, 51, stepped down as CEO of Visa in December, citing a desire to spend more time with his family in New York. He will stay on as an adviser to the San Francisco company through the end of March. What comes next for Scharf is unclear but, given his relatively young age and sterling resume, he could soon resurface in a plum job on the East Coast. One analyst recently said he could be a future candidate for CEO at American Express or JPMorgan Chase. Scharf has spent most of his career in banking. He is a protégé of JPMorgan CEO Jamie Dimon and was hired as Dimon's assistant at Commercial Credit in the late 1980s, after graduating from college. Scharf followed the Wall Street icon for decades including to JPMorgan, where he oversaw the New York company's retail and private-equity units before joining Visa in 2012. Unlike his mentor, Scharf has been described by Bloomberg as quiet and methodical, known to unwind by playing acoustic guitar or building furniture in a woodshed in his backyard.

Nandita Bakhshi, President and CEO, Bank of the West

To be clear, Bank of the West in San Francisco is not a bank in need of an overhaul. The $80 billion-asset bank earned record profits last year, is one of the nation's fastest-growing small-business lenders and enjoys a strong reputation for service and innovation. But it has lagged its peers of late in key metrics like returns on assets and equity, and its parent company, BNP Paribas, is counting on Nandita Bakhshi to reverse that trend. Bakhshi, formerly the head of digital channels at TD Bank, joined Bank of the West as a CEO-in-training in April and took the helm officially on June 1. Key to improving the results is increasing top-line revenue and Bakhshi says she is willing to take some risks from moving into new markets to adding new fee-based businesses to expand the customer base. But don't expect her to stray too far from her or the bank's comfort zone. "When I say I'm a risk-taker, I'm a smart risk-taker," she said.

Scott Sanborn, CEO, Lending Club, and David Kimball, CEO, Prosper Marketplace

Two pioneering marketplace lenders replaced their CEOs this year, as the entire sector endured a rapid fall from grace. Now Scott Sanborn and David Kimball face the same basic challenge: reigniting the rapid growth that previously spurred so much optimism. Sanborn, who took the helm of Lending Club in May, has a bit of a head start. His company's loan volume bounced back a bit in the third quarter after a tough start to the year. Lending Club started refinancing auto loans in October in an effort to further boost growth. Kimball, a former USAA executive, took the reins at Prosper on Dec. 1. The privately held lender is in need of a turnaround after third-quarter loan volume dropped by 30% from the second quarter.

Harit Talwar, Head of Digital Finance, Goldman Sachs

Goldman Sachs' move into online consumer lending has been one of the more intriguing developments in banking this year, and competitors including banks and marketplace lenders will be watching closely to see if the venerable investment bank is able to make inroads with the masses. Leading the venture, dubbed "Marcus" in honor of co-founder Marcus Goldman, is Harit Talwar, a former executive at Discover Financial Services who joined the firm last year as its head of digital finance. Marcus is offering unsecured personal loans of up to $30,000 at rates it says are below those of many credit cards, and its target audience is consumers looking to pay off high-interest credit card debt. Among the advantages Goldman has over competitors such as Lending Club and Prosper are a deep marketing budget and a healthy base of deposits that it can use to fund loans. Its challenge, of course, is overcoming the perception that it's a bank for the 1%.

Blake Wilson, Kathie Andrade, TIAA

TIAA's deal for EverBank will not close until early 2017, but when it does, it could be a game-changer. Thought TIAA, best known for providing insurance, retirement and investment services to its clients, had been quietly building an online bank in recent years, its deal for the $27.4 billion-asset bank "leapfrogs our growth plans for the bank by about a decade," a spokesman told American Banker when the deal was announced in August. Blake Wilson, EverBank's president, is to become president and CEO of the combined (and still unnamed) bank, and Kathie Andrade will oversee the bank in her role as TIAA's CEO of retail financial services. Chief among their responsibilities will be figuring out how to provide banking products particularly mortgages to TIAA's 5 million retail clients, as well as additional services to its 16,000 institutional clients. Their big challenge: seamlessly integrating two vastly different companies.