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Returns from sender

21 March 2016 By Antony Currie

America’s bank chiefs are just warm-up acts for Jamie Dimon – or at least for the JPMorgan boss’ annual letter to shareholders. The head honchos at Bank of America, Citigroup and others have included interesting tidbits in their shareholder missives. But most have revealed little about the state of the industry.

Granted, some chief executives may not have felt in the best position to offer opinions. Regions Financial’s Grayson Hall, Citizens Financial’s Bruce van Saun and Citi’s Michael Corbat crafted three of the shortest letters – and have produced lackluster if improving results.

The banks to beat on performance didn’t offer much more. U.S. Bancorp boss Richard Davis and John Stumpf at Wells Fargo did, at least, give a nod to growing competition from financial technology firms. But only PNC’s William Demchak made any attempt to address the challenges from Silicon Valley and defend the role traditional lenders play. He also tried to show how his shareholders are benefiting from adopting technology, as it allowed PNC to cut $250 million of costs – though that’s just 2.6 percent of last year’s expenses.

BofA chief Brian Moynihan touched on that, too, noting that the number of transactions his bank now performs over digital channels would in the past have required 650 brick-and-mortar branches. He also reminded shareholders that BofA has enough cash to survive for three years without borrowing money and had just four days of trading losses last year.

Only Robert Wilmers of M&T Bank offered a deeper analysis of American banking. He kicked off his 28-page letter by saying last year “tested the viability of (banking) business models and the ability of management teams.” He then detailed the cost of regulation to his $123 billion-in-assets institution and to the industry as a whole. He also explained why he believes smaller banks have gotten a rum deal from Washington.

That puts Wilmers into a separate camp from virtually all bank chiefs except Dimon. His letters run longer and are more in-depth than most. They are also among the last to appear. True to form, investors are still waiting for word from JPMorgan’s head honcho.

 

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