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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Baker McKenzie today announced that leading project finance lawyer Matthias Schemuth has joined the Firm’s Singapore office* as a Principal and Asia Pacific Co-Head of Projects in its Finance & Projects practice, alongside Partner Jon Ornolffson in Tokyo.
Matthias joins the Firm from DLA Piper, bringing more than 20 years of experience in the energy and infrastructure sectors across Asia Pacific. He advises sponsors, developers, commercial banks, multilateral lending agencies, and export credit agencies on the structuring and financing of large-scale projects. His practice also spans international banking, structured commodity and trade finance, with a strong focus on emerging markets. Matthias has been consistently recognised by Chambers Asia Pacific and Who’s Who Legal as a leading project finance practitioner.
James Huang, Managing Principal of Baker McKenzie Wong & Leow in Singapore, said: “We are excited to welcome Matthias to our team. His expertise and proven record in managing teams will be invaluable as we expand our regional and global finance offerings for clients.”
Emmanuel Hadjidakis, Asia Pacific Chair of Baker McKenzie’s Banking & Finance Practice, commented: “Asia Pacific is seeing strong momentum in infrastructure development, energy transition investments, and cross-border project financing, much of it centred in Singapore. Having Matthias on board will further enhance our ability to help clients seize opportunities in the region’s evolving energy and infrastructure markets.”
Steven Sieker, Baker McKenzie’s Asia Chief Executive, added: “Matthias’s appointment underscores Baker McKenzie’s continued commitment to investing in exceptional talent across key markets to support our clients in navigating today’s increasingly complex business and regulatory environment.”
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Matthias said: “I’m thrilled to join Baker McKenzie and contribute to its strong growth in Asia Pacific. The Firm’s global reach and local depth provide an unparalleled platform for delivering innovative projects and financing solutions to clients in this dynamic region.”
With more than 2,700 deal practitioners in more than 40 jurisdictions, Baker McKenzie is a transactional powerhouse. The Firm excels in complex, cross-border transactions; over 65% of our deals are multijurisdictional. The teams are a hybrid of ‘local’ and ‘global’, combining money-market sophistication with local excellence. The Firm’s Banking & Finance lawyers are ranked in more jurisdictions than any other firm by Chambers.
Matthias’s hire continues the expansion of Baker McKenzie’s global team. His joining follows the recent arrivals of Carole Turcotte in Toronto; Tom Oslovar in Palo Alto; Jenny Liu in New York and Palo Alto; Helen Johnson, Mark Thompson, Nick Benson, Kevin Heverin, James Wyatt and Michal Berkner in London; Jan Schubert in Frankfurt; Todd Beauchamp and Charles Weinstein in Washington DC; Dan Ouyang, Winfield Lau, and Ke (Ronnie) Li in Beijing, Shanghai, and Hong Kong; and Alexander Stathopoulos in Singapore.
*Baker McKenzie Wong & Leow is the member firm of Baker McKenzie in Singapore
The Federal Reserve gave investors an early Christmas present by lowering interest rates by 25 basis points (i.e., 0.25%) marking its third rate cut this year. In the past, a change like this in the “long end” of the interest rate yield curve has triggered a predictable, investable pattern. Typically, this pattern would be bearish for finance stocks, particularly banks—investors would buy bank stocks when rates rose and sell them as rates fell….
Dozens of protesters from the “Religious Zionist Reservists Forum” and the “Shared Service Forum” demonstrated Saturday evening outside the home of Finance Minister Bezalel Smotrich in Kedumim.
The protesters arrived with a direct and pointed message, centered on a symbolic “draft order,” calling on Smotrich to “enlist” on behalf of the State of Israel and oppose what they termed the “sham law” being advanced by MK Boaz Bismuth and the Knesset’s haredi parties.
Among the protesters in Kedumim were the parents of Sergeant First Class (res.) Amichai Oster, who fell in battle in Gaza. Amichai grew up in Karnei Shomron and studied at the Shavei Hevron yeshiva.
Protesters held signs reading: “Smotrich, enlist for us,” along with the symbolic “draft order,” calling on him to “enlist for the sake of the State’s security and to save the people’s army – stand against the bill proposed by Bismuth and the haredim!”
Parallel demonstrations were held outside the homes of MK Ohad Tal in Efrat and MK Michal Woldiger in Givat Shmuel.
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Representatives of the “Shared Service Forum” said: “We are members of the public that contributes the most, and we came here to say: Bezalel, without enlistment there will be no victory and no security. Do not abandon our values for the sake of the coalition. The exemption law is a strategic threat, and you bear the responsibility to stop it and lead a real, fair draft plan for a country in which we are all partners. It’s in your hands.”
