Re­gional banks lure half of new ex­ec­u­tives from big­gest ri­vals

The Pak Banker - - COMPANIES/BOSS -

Wall Street banks have been bleed­ing tal­ent to hedge funds, buy­out firms and tech­nol­ogy com­pa­nies. Now they're fac­ing another preda­tor: smaller lenders in states like Ohio and Rhode Is­land.

US re­gional banks are lur­ing ex­ec­u­tives from global ri­vals with an ease and fre­quency un­seen be­fore. About half the re­cruits for se­nior-level open­ings at mid­size banks are peo­ple whose re­sumes lead with names in­clud­ing Cit­i­group Inc. and JPMor­gan Chase & Co., es­ti­mates Robert Voth, man­ag­ing di­rec­tor in the fi­nan­cial ser­vices group at Rus­sell Reynolds As­so­ci­ates, a re­cruit­ing firm. The share was about a fifth be­fore 2008's credit cri­sis, he said.

While re­gional banks aren't the big­gest raiders -- they can't match the po­ten­tial riches of­fered by in­vest­ment and tech com­pa­nies -- they are highly mo­ti­vated. They must adapt quickly to new reg­u­la­tions, tech­nol­ogy and com­pe­ti­tion from online star­tups, and in some cases staff new units, so they're seek­ing peo­ple from firms a step ahead, ac­cord­ing to re­cruiters.

"Re­gional banks don't have a deep bench of peo­ple with those skills, so they of­ten have to look up­stream," Voth said.

In in­ter­views, more than a dozen se­nior-level de­fec­tors cited a va­ri­ety of rea­sons for moves in the past two years: the chance to in­flu­ence big de­ci­sions with­out be­ing over­whelmed by bu­reau­cracy; the de­sire to play the hero in a turn­around; and bet­ter work-life bal­ance. They joined firms such as Re­gions Fi­nan­cial Corp. in Birm­ing­ham, Alabama, and Fifth Third Ban­corp in Cincinnati.

Ex­ec­u­tives wouldn't spec­ify pay, but sev­eral de­scribed it as com­pet­i­tive. While money of­ten is the key lure in fill­ing in­vest­ment bank roles, re­cruiters said other man­agers typ­i­cally con­sider ad­di­tional fac­tors when mov­ing.

Some bankers asked not to be iden­ti­fied, be­cause they weren't au­tho­rized to speak, and some firms that re­cently wrest- ed tal­ent, in­clud­ing U.S. Ban­corp and SunTrust Banks Inc., said they didn't want the new ex­ec­u­tives to give in­ter­views. Here are sev­eral who did.

Af­ter 16 years at Gold­man Sachs Group Inc., Maria Teresa Te­jada said it be­came clear: She wasn't go­ing to get one of the firm's cov­eted part­ner­ships.

A man­ag­ing di­rec­tor in Lon­don's riskun­der­writ­ing group, she didn't in­ter­act with many of the bank's New York-based lead­ers and her work within a team made it dif­fi­cult to show how much she con­trib­uted to the bot­tom line. She also strug­gled to find a men­tor to ad­vise her on the part­ner process, which she felt would be harder as a woman.

As chief credit of­fi­cer at KeyCorp, based in her home­town of Cleve­land, she found the ac­count­abil­ity and role in de­ci­sions that she craved. Gold­man Sachs is nine times big­ger by both as­sets and an­nual profit. But mov­ing from Lon­don's pricey South Kens­ing­ton neigh­bor­hood to Cleve­land's Shaker Heights added a ben­e­fit she hadn't ex­pected.

"We could give our daugh­ter a bet­ter life: She could ride her bike to school and spend time in the out­doors," Te­jada said. "This was a bet­ter per­sonal tran­si­tion on top of what it did for my ca­reer." Cit­i­group and JPMor­gan to Cit­i­zens Eric Aboaf's job was any­thing but bor­ing at Cit­i­group. Just months be­fore nam­ing him trea­surer in 2009, the bank took a $45 bil­lion bailout to sur­vive the fi­nan­cial cri­sis. For more than five years, he was in charge of en­sur­ing cash flowed as the firm slashed as­sets, sold units, sim­pli­fied oper­a­tions span­ning more than 160 coun­tries and re­paid taxpayers. "We put Citi back on its feet, and I felt like in some ways I had ac­com­plished a lot -- so what's next?" he said. The an­swer was build­ing some­thing. Cit­i­zens Fi­nan­cial Group Inc. Chief Ex­ec­u­tive Of­fi­cer Bruce Van Saun en­listed him this year as fi­nance chief to help ex­pand the Providence, Rhode Is­land­based len­der af­ter its spinoff from Royal Bank of Scot­land Group Plc.

"This is about be­ing part of a real turn­around," said Aboaf, who took the post in April. "At a mid-size bank, you're closer to the busi­nesses."

That's also what drew Don McCree, who re­tired last year from JPMor­gan's cor­po­rate bank af­ter 31 years at the com­pany. McCree had planned to join a pri­vate-eq­uity firm or start his own credit hedge fund. In­stead, he's lead­ing Cit­i­zens' push into com­mer­cial bank­ing.

"At JPMor­gan, my ex­pe­ri­ence was in build­ing and grow­ing busi­nesses, but we had got­ten to a place where we were ma­jor play­ers," said McCree, who will as­sume his new post in Septem­ber and is mov­ing to Bos­ton, where he has fam­ily. "At Cit­i­zens, I saw it as a rare op­por­tu­nity to en­ter on the ground floor and ac­tu­ally build some­thing again."

Joe Wel­don spent about two decades at the big­gest Wall Street banks, in­clud­ing Bank of Amer­ica Corp. and Cit­i­group, run­ning oper­a­tions that shaped other peo­ple's ca­reers. He cred­its his wife for per­suad­ing him to con­sider work­ing at a re­gional bank based in Pittsburgh.

As head of learn­ing and de­vel­op­ment at Cit­i­group, Wel­don didn't think much of it when a head­hunter called last year about be­com­ing PNC Fi­nan­cial Ser­vices Group Inc.'s di­rec­tor of tal­ent. His wife, how­ever, used to work with PNC CEO Bill Dem­chak when he was at JPMor­gan, and she en­cour­aged her hus­band to lis­ten. Af­ter con­ver­sa­tions with Dem­chak and other ex­ec­u­tives, Wel­don was sur­prised to learn how much flex­i­bil­ity he would get at a smaller bank to im­ple­ment his ideas.

"When I talk with friends at large global banks, we all share some level of frus­tra­tion about how hard it is to have a big im­pact," Wel­don says. "It can be dif­fi­cult to get con­sen­sus and drive teams in the same di­rec­tion just given the size and com­plex­ity of an or­ga­ni­za­tion when you're op­er­at­ing in so many dif­fer­ent coun­tries and re­gions. When you're work­ing in a smaller com­pany, you can start to see re­sults im­me­di­ately."

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