Banking

Goldman restocks consumer banking team; Ray McGuire’s big bonus

Receiving Wide Coverage …

Three strikes

Hartford Financial Services “has rebuffed two additional unsolicited takeover offers from its rival Chubb, the highest of which valued the company at $25 billion,” the Financial Times reported. “Chubb, the insurance group led by Evan Greenberg, made a $65-per-share offer for Hartford in March, but the Hartford board said its go-it-alone strategy would build more value for investors. In an update alongside its quarterly results statement on Thursday, it disclosed that Chubb followed up in a letter on March 30 saying it was prepared to make an offer ‘in excess of $67 a share.’ Greenberg wrote again on April 14 to say that the insurer would increase its offer to $70, which it described as ‘the top end of our range.’ ”

In an interview with The Wall Street Journal, Hartford CEO Christopher Swift “said he received a quick head’s up from Chubb that an offer was coming. But there were no dinner meetings or other advance conversations about the potential pairing of two of the nation’s best-known property-casualty insurers. He said the March offer was an impersonal start to what are now three proposals from Chubb to acquire Hartford. Each one has been evaluated and unanimously rejected by the insurer’s board.”

“A transaction would have been one of the biggest-ever deals in the U.S. property-casualty insurance industry.”

Wall Street Journal

Advice for Credit Suisse

Credit Suisse’s “decision to raise about $1.85 billion in new capital makes sense. Sticking to its current strategy doesn’t,” the Journal says.

“Growing investment banking revenues usually comes with added risks that may not materialize until much later, as the recent troubles have made painfully obvious. Capturing market share in such a hypercompetitive business is tough, and often requires something extra, such as undercutting rivals or working with problematic clients. Credit Suisse should consider much deeper cuts to its already-subscale investment bank. Slimming it down further to provide only those services required by its wealth-management clients, as better-valued crosstown rival UBS has done, would reduce revenues but also cut risk and free up capital to invest in less volatile business, whether in Asia or Switzerland.”

Financial Times

Packing for Singapore?

Wells Fargo “has been quietly working on a plan to move its Asian regional hub from Hong Kong to Singapore as part of wider restructuring efforts. The move comes as the bank is drastically cutting costs and during a tumultuous time for Hong Kong. The plan would involve slowly building up Singapore as Wells Fargo’s Asian hub through a mixture of new hires and redundancies in Hong Kong. It would still maintain a presence in the territory.”

But the bank sought to debunk the story. “Wells Fargo has a long-term presence in Hong Kong, Singapore and the Apac region, including Japan and mainland China, and we will continue to maintain this presence,” it said. “Suggestions we are moving our focus away from Hong Kong do not accurately reflect our commitment to this market.”

Elsewhere

Restocking

Goldman Sachs “is rehiring a former executive in its consumer bank division and promoting several others, as the company seeks to replenish its top leadership after several key departures in recent months,” Reuters reported. “Brian King is rejoining Goldman as its consumer chief risk officer and head of business operations. King led risk oversight for Goldman’s consumer bank division from 2018 to 2020, when he left to become the chief risk officer for Wells Fargo & Co.’s consumer and small business banking division.”

“In addition, Goldman’s Chantal Garcia was named chief operating officer and head of talent strategy in the consumer bank division, and Scott Young will serve as the chief commercial officer there. In other moves in the consumer bank division, Abhinav Anand will lead lending and Marcos Rosenberg will lead deposits and investments in the U.S.”

Citi shows McGuire the money

Ray McGuire, a former executive at Citigroup who left the bank last year in order to run for mayor of New York City, “will receive more than $5.7 million from Citigroup as part of a bonus program,” Reuters reported. “McGuire was one of the senior-most Black executives on Wall Street till he left Citi last year after 15 years in various roles. McGuire headed Citi’s corporate and investment banking unit for 13 years and was also chairman of banking, capital markets and advisory. Prior to Citi, he was with Morgan Stanley.”


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