Citi names new accounting chief; commercial mortgage collateral dwindles
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Changing of the guard
Commerzbank named Manfred Knof, “head of rival Deutsche Bank’s private bank in Germany, as its new chief executive, putting a banking- and insurance-industry veteran in charge of likely deeper cost cuts at the German lender,” the Wall Street Journal reported. “Mr. Knof, who will take over in January, will succeed current CEO Martin Zielke, who resigned along with Commerzbank’s chairman in July after acknowledging he had failed to sufficiently turn around the bank.”
Knof’s nomination as Commerzbank’s CEO “paves the way for an overhaul that could close hundreds of branches and shrink its foreign operations, though any major changes may still take months to formalize,” Reuters said.
“Leadership will need to digitize and standardize processes to cut costs. Thousands of the bank’s nearly 48,000 jobs are on the line. The lender is considering slashing its network of 800 branches, following the recent closure of 200. A further cull to the bank’s already slimmed-down international operations is also on the agenda.”
Wall Street Journal
Citigroup named Johnbull Okpara, global head of financial planning and analysis and CFO of the infrastructure groups at Morgan Stanley, as its new controller and chief accounting officer. He succeeds Jeff Walsh, who came out of retirement to serve in the role on an interim basis.
Okpara, who was deputy controller at Capital One before joining Morgan Stanley in 2016, said he will join Citi after he is released “from certain commitments to his current employer.”
Two former Deutsche Bank employees were found guilty by a federal jury in Chicago Friday of manipulating precious-metals prices, “boosting prosecutors’ efforts to punish traders for conduct that has cost banks millions of dollars in civil and criminal fines. The verdict represents prosecutors’ second win in trials over conduct known as spoofing, a rapid-fire manipulation tactic that involves sophisticated detective work to expose.”
“Companies including Deutsche Bank and Bank of America have collectively paid hundreds of millions of dollars in fines over spoofing claims. With Friday’s outcome, three traders have now been convicted of spoofing-related crimes. Another trader was acquitted, and another trial ended in a hung jury.”
Citigroup’s Jane Fraser may have “cracked the glass ceiling” when she was named “the first woman CEO of a major Wall Street bank,” but Maggie Lena Walker “first battered down the walls. The daughter of a former slave, Walker became the first Black woman ever to head a U.S. bank when she founded the St. Luke Penny Savings Bank in Richmond, Va., in 1903. Walker zeroed in on an underserved market and focused her prodigious energy on meeting its needs. But her story is all the more remarkable because it played out on a stage of such intense bigotry.”
“She called for St. Luke to create a department store and a newspaper—but, above all, a bank. That, she believed, was the way to uplift Black women. ‘Let us put our moneys together; let us use our moneys; let us put our money out…and reap the benefit ourselves,’ she said. ‘Let us have a bank that will take the nickels and turn them into dollars.’”
“Commercial properties hit by the economic effects of coronavirus could have lost as much as one-quarter of their value or more, laying bare the scale of the damage being wrought across American malls, hotels and other commercial buildings. Evidence emerging in the commercial mortgage-backed securities (CMBS) market from recent appraisals also raises questions over the value of the collateral backing commercial mortgages throughout the financial system.”
“Properties that have gotten into trouble are being written down by 27% on average, data from Wells Fargo shows. Recent examples show hotels being especially hard hit, given the collapse in tourism and business travel.”