Good morning. I think it’s safe to say we’ve all heard a quote or anecdote about the benefits of always being prepared for an opportunity. I’ve found that philosophy to be true, and I think Citizens Financial Group provides a tangible example.
Citizens, headquartered in Providence, R.I., has $222 billion in assets as of Dec. 31, and is the 14th-largest bank in the U.S. I recently had a conversation with John F. Woods, vice chair and CFO at Citizens, for the latest edition of Fortune’s Future of Finance series.
“For a number of years, one of our strategic objectives has been to be able to serve high-net-worth individuals,” he told me. “We did that a while back when we acquired a company called Clarfeld. That created capabilities to provide advice to the high-net-worth customer segments. But we had been unable to scale that platform because of the need to have enough bankers to interact with this customer segment. The opportunity arose when First Republic started to get into trouble last spring.”
First Republic Bank was closed by the California Department of Financial Protection and Innovation on May 1, 2023, with the FDIC appointed as receiver.
“We had an opportunity to bid on acquiring First Republic,” Woods explained. “We didn’t win that bid—JPMorgan did. However, as part of that process, we became very attracted to the business model at First Republic. And a lot of the private bankers who worked at First Republic didn’t want to work at a very large bank—that’s the reason they worked at that bank in the first place.”
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The conversation with a handful of people accelerated to about 150 people hired as private bankers to work in California, Boston, New York, and Florida, Woods said. The bank announced earlier this month the hiring of Michael Cherny as head of wealth management advisors and Tom Metzger as head of private wealth managers. Citizens has opened its first private-banking office in Boston and has plans to open additional offices in 2024, including in Palm Beach, Fla., and in Mill Valley, Calif., in the spring.
Woods expects the private bank is going to generate significant returns. “We just formally launched [the private bank] in the fourth quarter of 2023, and we have over a billion dollars of deposits already,” he told me.
During our conversation, Woods also talked about how the CFO role is changing: “The evolution of the CFO role over the past decade or more involves an intensifying expectation that the CFO is a partner to the CEO and to the business unit leaders on deriving strategy.”
You can read the complete Future of Finance interview here.
Sheryl Estrada sheryl.estrada@fortune.com
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Leaderboard
Cosmin Pitigoi was named CFO at Flywire Corp. (Nasdaq: FLYW), effective March 4. Pitigoi previously spent 20 years in finance leadership roles at PayPal and eBay, where he was most recently SVP in PayPal finance. While at eBay, Pitigoi held leadership roles across investor relations, business unit FP&A and treasury, and began his career in operational and finance roles at E-Trade and Barclays.
Michael Niggemann is going to step in as interim CFO at Lufthansa Group, effective May 7, in addition to his existing duties as a board member for the division of Personnel, Logistics, and Non-Hub Business. Current CFO Remco Steenbergen is one of four executives stepping down as the airline is “reshaping and realigning its executive board,” as stated in the announcement. The decision comes as the airline is moving away from the COVID-19 era, according to Lufthansa.
Big deal
While employers often rely on colleges as a principal supplier of professional talent, college is not a guarantee of labor market success, according to a new report by Burning Glass Institute and the Strada Education Foundation.
Talent Disrupted: College Graduates, Underemployment, and the Way Forward finds that one of biggest risks students face is that their degree will not provide access to a college-level job. Today, only about half of bachelor’s degree graduates secure employment in a college-level job within a year of graduation, the research finds. Among the underemployed recent college graduates, the vast majority (88%), are severely “underemployed”—working in jobs that typically require only a high school education, or less, such as jobs in office support, retail sales, food service, and blue-collar roles in construction, transportation, and manufacturing.
Just 12% are moderately underemployed, for example, working in jobs that require some education or training beyond high school but less than a bachelor’s degree. The findings are based on dataset of 60 million workers in the United States, including approximately 10 million who has a terminal bachelor’s degree.
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However, participation in internships makes a difference. There is a strong correlation between internships and college-level employment after graduation, according to the report. The odds of underemployment for graduates who had at least one internship are, on average, 48.5% lower than those who had no internships. The benefits associated with completing an internship are relatively strong across degree fields.
Courtesy of The Burning Glass Institute
Going deeper
An updated report from the International Federation of Accountants (IFAC) and AICPA & CIMA finds that the largest global companies are providing more detail about their sustainability reporting, and also are obtaining a greater scope of assurance on those disclosures. The study, which is an annual benchmark now including 2022 data, also found the use of varying sustainability standards and frameworks continues to make it difficult for investors, lenders, and other stakeholders to find consistent and comparable sustainability information.
Overheard
“If you don’t have everybody pretty much on board, you can have major countries not acting with a kind of cooperative sense; [then] they can make a real mess elsewhere.”
—Blackstone cofounder and CEO Stephen Schwarzman spoke at length about his fears on AIduring a panel at the FII Priority Miami Summit, Fortune reported. He also argued that AI could help criminals that otherwise would not have been very bright.
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Consumer confidence has plunged among traditionally optimistic younger adults amid fears for their personal finances and the wider economy, figures show.
GfK’s long-running Consumer Confidence Index remained unchanged at an overall score of minus 23 in June.
However, the analyst said this was was “misleading as, beneath the surface, there are new signs that confidence is weakening”.
Source: GfK
Neil Bellamy, consumer insights director at GfK, said: “The biggest fall this month is among those aged 16 to 29, traditionally one of the most optimistic groups.
“Here confidence has dropped 11 points over the past month to minus two, the lowest level seen for two years, driven by large falls in views on both their own personal finances and the wider economy.
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“More broadly, there are now no demographic groups with a positive confidence score, including higher-income households earning £50,000 or more, who have slipped back into negative territory as of June.
“Confidence remains subdued and vulnerable to further economic or political uncertainty.”
Sourve: GfK
Overall, confidence in personal finances over the coming year remained flat at minus two, four points lower than this time last year.
The measures of both personal finances and the economy over the previous 12 months were both slightly down, by two points and three points respectively, “reflecting the sense that things have been extremely tough over the last year for so many”, GfK said.
The only measure to increase was expectations for the wider economy over the next 12 months, up two points to minus 36 but still eight points below this time last year.
The major purchase index, an indicator of confidence in buying big ticket items, remained at minus 20, four points lower than June last year.
“Ships of the World, start your engines. Let the oil flow!” said Donald Trump on social media after he announced the signing of an interim peace deal with Iran on Sunday. Under the agreement – which Iran acknowledged included a 60-day negotiating period for a final deal – the president said that following retrieval of mines, there would be a “toll free opening” of the Strait of Hormuz.
But many of the finer details remain “unclear”, said The Guardian. There are questions over the “exact timing of the reopening of the maritime route, who will oversee safe passage and whether any conditions will be applied”.
Financial markets have welcomed the announcement, but further volatility could yet hit people’s pockets.
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Have oil prices changed?
The price of oil fell to about $83 (£62) per barrel following Sunday’s announcement, its “lowest since the early days of the war”. Then on Tuesday it dipped below $80. In February, before the first missiles struck Iran, each barrel cost around $73. The price peaked at around $120 at the height of the conflict.
Prices are expected to fall in the wake of a prolonged ceasefire, and there are “real grounds for optimism”, said Politico. Damage to oil-specific infrastructure has been “limited”, meaning it could take “as little as six weeks to resume outflows”.
“So that’s the energy crisis sorted, right?” Not so fast.” A combination of damage to wider infrastructure and the continued closure of the Strait of Hormuz has meant roughly 12 million fewer barrels of oil have been produced each day. And they “won’t magically reappear on the market even if the pact holds”.
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Will this continue?
The “first big test” of the deal will be whether shipping companies will have enough “confidence” to return the use of the strait to pre-war levels, said The New York Times. If successful, this will free the 250 tankers and 330 cargo ships trapped in the Gulf, according to the BBC, and transport oil around the world. Oil and gas producers in the Gulf nations would then need to re-establish “wells, refineries and other infrastructure”.
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Even if all of that were to materialise, European and Asian countries who have historically depended on oil from the region “will face a long wait”. Processing oil takes considerable time. “It is unlikely that the prices of gasoline, diesel and other fuels will return to pre-war levels anytime soon.”
What about inflation?
Despite air fares “surging” and fuel costs “tipping higher”, UK inflation remained at 2.8% in May, said The Independent. This was a “surprise” to economists, who had widely predicted a rise to 3% and “perhaps even beyond” due in part to the war in Iran.
Remaining at this level could imply that the “cost-of-living squeeze will not play out as badly as had been anticipated” earlier this year, even if the “Iran war sent energy costs spiralling”. However, prices are set to rise again later in 2026, leaving savers to make sure their investments are earning an interest rate “well above the rate of inflation”.
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What does this mean for consumers?
Food prices in the UK look to be rising more slowly. Should the Strait of Hormuz open freely, fertiliser, which has “soared in costs” and put pressure on farmers, could fall substantially, said the BBC. Jet fuel has already seen a “small fall in price”, with Northwest Europe jet fuel trading at $1,033 (£780) per tonne, compared with $831 pre-conflict and around $1,840 at its peak.
How will businesses be affected?
Beneath the “encouraging headlines” about inflation control, there is a “hidden crisis for businesses”, said The Telegraph. The Iran war triggered one of the largest energy shocks in history, meaning businesses were “swallowing soaring costs to spare shoppers”.
“Input rises” for producers climbed by “8.7% year on year in May”, larger than the 7.9% in April and the highest in more than three years. On the bright side, this means the economy may avoid a dreaded “wage-price spiral”, but conversely lower margins could lead to increased pressure on the employment market.
Hong Kong graduates believe the city’s finance industry is its most attractive and stable sector, making them more optimistic about career opportunities than their global peers, according to a study by the CFA Institute, which trains investment managers.
The US-based institute’s “2026 Graduate Outlook Survey”, released on Wednesday, found that 71 per cent of Hong Kong graduates rated their career prospects between eight and 10 out of 10. The global average for that level of optimism was 59 per cent.
The graduates’ view of careers in finance reflected “both the sector’s resilience and Hong Kong’s continued strength as an international financial centre, which ranks third worldwide and first in Asia-Pacific”, the institute said in a statement.
The findings also indicated that young people were confident about Hong Kong’s role as an international financial centre, resilient amid global uncertainties, and strategically focused on improving skills, it said.
That confidence was “deeply grounded”, it said, with nearly 90 per cent believing they had the skills to succeed and clearly understood what employers were looking for, notwithstanding the wider adoption of artificial intelligence in the city.
“Rather than viewing AI as a threat, 38 per cent of Hong Kong graduates believe it has no negative impact on their job hunting, and 37 per cent believe it makes securing a job easier,” the institute said. “Three quarters are already actively using AI tools in their job applications, demonstrating a proactive, tool-first mindset.”
