Your Banker Quit His Job This Week

The past few days saw a host of executive transitions, with high-level moves at Wells Fargo, JPMorgan Chase, and Citigroup. Bank of America, meanwhile, apparently nudged closer to settling its second big legal case in as many weeks.

Eric Volkman
Eric Volkman
Apr 4, 2014 at 2:00PM
Financials

This week, sandwiched between the results of the Federal Reserve's CCAR and the start of Q1 bank earnings season, much of the news in the financial sector had to do with executives who resigned, were hired, or moved to a new job.

Arguably the most significant executive suite change was at Wells Fargo (NYSE:WFC). The big lender wasn't kidding when on April Fool's Day it announced that it is replacing its chief financial officer. John Shrewsberry, currently the head of its Wells Fargo Securities capital markets division, will take the place of Tim Sloan in late June. In turn, Sloan will move on to become Wells Fargo's head of wholesale banking.

Personnel comings and goings were also the topic of discussion at JPMorgan Chase (NYSE:JPM) over the past few days. The head of the bank's sprawling commodities operations Blythe Masters -- considered to be one of the most powerful women on Wall Street -- is vacating her position following the company's sale of its physical commodities business. Although that end of finance isn't as lucrative as it once was, the resignation of the 27-year company veteran will almost certainly have an impact on morale.

Masters' is the second high-level departure for JPMorgan Chase in as many weeks. Last week, investment bank co-chief Mike Cavanagh, once considered a possible successor to CEO Jamie Dimon, undoubtedly surprised his employers when he tendered his resignation. He's stepping down to take a job as co-chief operating officer of financial services firm Carlyle Group (NASDAQ:CG), and won't be replaced -- Daniel Pinto is to take the reins as sole CEO of the division.

In contrast, the talk of human resources over at Citigroup (NYSE:C) was over who was staying at the company, rather than departing. On Thursday the bank said Gene McQuade, who recently served notice that he would retire as CEO of core subsidiary Citibank, will head the company's CCAR appeal. Citigroup was one of only five banks that did not get its capital allocation plans approved;hopefully McQuade will be able to lead a team that can draft a winning appeal, thus breathing some life into the stock.

No big heads rolled or were talked out of retirement at Bank of America (NYSE:BAC) this week. Rather, the major headline for the company was in the legal sphere. On Thursday, news leaked out that Bank of America was nearing a settlement with the Consumer Financial Protection Bureau over the add-ons it allegedly pressured its credit card customers to sign up for. Apparently the firm could cough up over $800 million to put the matter to rest.

Bank of America is in a settling mood these days, closing a deal last week with the Federal Housing Finance Agency to pay a roughly $9.5 billion settlement in order to retire allegations about fraudulent claims on some of its mortgage-backed securities.

Next week is going to be an eventful one for the banks, with Q1 results coming down the pipe from Wells Fargo and JPMorgan Chase. This will put the new bank earnings season into gear, and headlines about profits and losses are sure to dominate no matter what changes occur in the executive suite.