PNC’s Demchak says he will not be Wells Fargo's next CEO
Cross William Demchak off the list of potential CEOs to replace Tim Sloan at the embattled Wells Fargo.
Demchak, the chairman, president and CEO at the $385.9 billion-asset PNC Financial Services Group, was asked during the Pittsburgh company’s quarterly earnings call Friday if he might be interested in the post, and he responded with a clear and resounding no.
“I like my job here, I like our company, I like our prospects, I like the people I work with, I like our clients, I like our communities, and I will end my career here,” he said, responding to an analyst’s question. “Beyond that, I’m not going to speculate on the successes or failures of our competitors.”
The San Francisco bank said it intends to look outside the organization for its next chief executive. Sloan succeeded John Stumpf as president and CEO in October 2016, after Stumpf retired in the wake of a scandal over thousands of phony accounts Wells Fargo bankers opened in customers’ names.
But Sloan was never able to convince lawmakers or the public that he was truly divorced from the company’s problems, and late in March, he announced his own retirement. Though Sloan officially retires on June 30, he stepped down from his post immediately. The company’s general counsel, C. Allen Parker, is interim CEO until Wells finds a replacement.
Some have suggested that Wells Fargo would look to replace Sloan with a current or former CEO of a large regional bank. Others have said that Wells Fargo could fill the post with a high-ranking executive at another large bank, though Warren Buffett, Wells Fargo’s largest shareholder, said it would be a mistake to hire someone with Wall Street ties.
“They probably shouldn’t come from JPMorgan or Goldman Sachs,” Buffett said in an interview with the Financial Times earlier this month, arguing that a Wall Street insider is "automatically going to draw the ire of a significant percentage of the Senate and the U.S. House of Representatives, and that’s just not smart.”
During the conference call, an analyst asked Demchak whether the pending merger between BB&T and SunTrust Banks puts pressure on PNC to make an acquisition of its own to keep pace. The combined BB&T-SunTrust would vault over PNC to become the nation’s fifth-largest commercial bank, behind JPMorgan Chase, Bank of America, Wells Fargo, Citigroup and U.S. Bancorp.
Demchak said that merger between BB&T and SunTrust “makes great sense for them,” he believes that PNC can grow organically.
An acquisition “would take our eye off the ball, and it just doesn't make sense and doesn't change our outcome strategically,” he said.
He added, however, that PNC could be interested in making smaller product or technology acquisitions “that aren’t major in scale.”
Earlier this year, for example, PNC bought a broker-dealer firm based in Allentown, Pa., to add to its capital markets capabilities.