UMB Financial Corp.'s hiring of veteran Bank of America Corp. executive Clyde Wendel is intended to spur the Missouri bank's fee income, according to president and chief operating officer Peter deSilva.
"We're really looking for Clyde to invigorate our asset management business overall," Mr. deSilva said in an interview Friday. Mr. Wendel, who will also oversee private banking, reports to him.
As the president of the Kansas City bank's asset management business and managing director of its private banking unit, Mr. Wendel is to oversee $9.2 billion of assets under management in all.
His ability to make a major impact was a key reason the 58-year-old Mr. Wendel was willing to leave Bank of America, where he was president of the Kansas City region and regional executive for its private bank, for a smaller organization, he said.
"This is the capstone opportunity of my career," said the longtime midwesterner.
Mr. Wendel said his first order of business is to analyze all the products in UMB's investment and wealth management, private banking, Scout Investment Advisors, institutional sales and service, and corporate trust areas. This would encompass everything from selling retail brokerage products to managing money for businesses and municipalities.
"Then I'll look at where our products are competitive and where there is an opportunity to bring added value to clients," he said. "What we want to do is drive increased revenue coupled with client satisfaction."
Fee revenue from Mr. Wendel's new bailiwick is important to the parent's success. UMB Financial said in a report on first-quarter results that its average loan-to-deposit ratio "has been, and is expected to continue [to] be, lower than [the] industry average."
The filing also said that UMB plans to continue diversifying its fee-based operations, including asset management and investment services. Some products may end up being dropped, he said, but UMB's proprietary mutual fund family, the Scout Funds, is not a candidate for divestiture, as bank-run fund families have been at other regional banks in recent years.
The proprietary funds generated record net inflows of $460 million in the first quarter, compared with $842 million for all of 2005, according to the quarterly report.
"I wouldn't join them if I thought they were going to be divesting parts of the business," Mr. Wendel said.
Mr. deSilva noted that fee income accounts for more than half the bank's earnings. "Asset management is one of the three legs of that stool," he said.
Mr. Wendel said his experience at Bank of America should help inform his decisions at UMB. For instance, B of A has a special group that focuses on investments having to do with farms and ranches, oil and gas, forest properties, and real estate, he said.
"Those types of assets can enhance overall return," he said, adding that he will consider adding private equity and alternative investments to UMB's mix.
"Access to alternative products is increasingly becoming a component of any wealth management business," said Burton Greenwald, a mutual fund consultant at BJ Greenwald Associates in Philadelphia. Up to now, he added, UMB has "not been an important player on the fund or trust side"
As at all banks, a key UMB customer segment is mass-affluent investors, including baby boomers with inherited money to put to work, Mr. Wendel said. So an important area will be providing strategic advice to people about managing their nest eggs during retirement periods that are projected to be increasingly long.
"Hell, we're all living longer, thank God," he said.
Asked what it will be like working for a $7.7 billion-asset banking company and competing against a $1.29 trillion institution (in B of A), Mr. Wendel said there is plenty of room in the market for UMB to grow.
"This business is not that difficult," he said. "It's about listening to the client, figuring out what they need, and developing solutions."
At March 31, UMB reported $4.3 billion of assets under management in its proprietary funds; $3 billion in its personal trust business, and $1.9 billion in its institutional and corporate trust businesses.
