In banking circles, the biggest story of 2019 was unquestionably the blockbuster merger between longtime rivals BB&T and SunTrust Banks. The merger was easily the industry's largest since the mega-mashups of the early 2000s, creating not just the nation's sixth-largest commercial bank, with roughly $470 billion of assets, but also an entirely new banking brand, Truist Financial.
Still, the deal was not just about scale. BB&T's Kelly King and SunTrust's Bill Rogers also pitched it as a tech play, promising to invest a large chunk of the estimated annual $1.6 billion in cost savings into difference-making technologies that would allow Truist to better compete with deep-pocketed behemoths like JPMorgan Chase and Bank of America. In 2020, investors, customers, regulators and rival bankers will be watching King and Rogers closely to see how well they manage the integration — and what they may have up their sleeves.
Another big story in 2019 was Wells Fargo's continued inability to move past the 2016 sales-practices scandal that has done untold damage to the bank's reputation and cost two CEOs their jobs. In 2020, all eyes will be on its newest CEO, Charlie Scharf, to see if he can deliver the turnaround his predecessors could not.
Others under the microscope this year include new CEOs of regional banks Santander, Comerica and KeyCorp, fintech disruptors with big ambitions in financial services and one governor looking to make good on a campaign promise to create what would be just the second state-owned bank in the continental U.S. Here are American Banker's leaders to watch in 2020.
Still, the deal was not just about scale. BB&T's Kelly King and SunTrust's Bill Rogers also pitched it as a tech play, promising to invest a large chunk of the estimated annual $1.6 billion in cost savings into difference-making technologies that would allow Truist to better compete with deep-pocketed behemoths like JPMorgan Chase and Bank of America. In 2020, investors, customers, regulators and rival bankers will be watching King and Rogers closely to see how well they manage the integration — and what they may have up their sleeves.
Another big story in 2019 was Wells Fargo's continued inability to move past the 2016 sales-practices scandal that has done untold damage to the bank's reputation and cost two CEOs their jobs. In 2020, all eyes will be on its newest CEO, Charlie Scharf, to see if he can deliver the turnaround his predecessors could not.
Others under the microscope this year include new CEOs of regional banks Santander, Comerica and KeyCorp, fintech disruptors with big ambitions in financial services and one governor looking to make good on a campaign promise to create what would be just the second state-owned bank in the continental U.S. Here are American Banker's leaders to watch in 2020.
Charlie Scharf, CEO, Wells Fargo
When Scharf was hired last fall, he said that his top priority would be to resolve Wells Fargo’s regulatory issues. Shareholders remain antsy about when the Federal Reserve Board’s February 2018 asset cap will be lifted, but the bank is also dealing with several government investigations, including a Department of Justice probe that may soon yield criminal indictments of former senior bank executives.
Scharf’s bigger challenge may be reinstilling confidence inside a firm where three years of scandal have diluted the longtime focus on sales. In his first three months on the job, Scharf hired outsiders to serve as chief operating officer, controller and vice chairman of public affairs. Some high-level holdovers have already announced plans to depart. Expect more to follow suit.
Then there is the bank’s uninspiring balance sheet. Revenue has fallen in four of the last seven quarters, and loan balances have generally been stagnant. Reducing costs figures to be a challenge as long as the company’s regulatory woes continue. In third quarter of last year, Wells Fargo’s efficiency ratio ballooned to 69.1%, thanks largely to a $1.6 billion litigation accrual for sales scandal-related costs.
Scharf has pledged to keep the company’s universal bank model intact — preempting questions about whether he plans to sell off big pieces of the firm — but he’s otherwise played his cards close to the vest. The public may learn more about what he has in mind on Tuesday, when Wells Fargo releases its first quarterly earnings report since the arrival of its new CEO.