TD Bank will close 82 of its 1,223 U.S. branches as part of a "store optimization" effort, Greg Braca, the bank's U.S. CEO, said Thursday during an earnings call. Most of the closures — set for locations with other branches nearby — will take effect in April, Bloomberg reported.
The move marks a 6.7% shrinkage of the Canadian bank's stateside brick-and-mortar footprint, and comes as TD revealed net income at its U.S. retail arm dropped more than 14% compared with the same quarter last year, a filing showed.
"You'll see markets in future years where we continue to invest in new stores," Braca said, according to Bloomberg. "But what you're also seeing is the need for investment in digital and digital capabilities, and we're doing just that."
That's what right-sizing looks like at one bank. At others, it may be a search for growth. JPMorgan Chase, for example, is looking for acquisition targets with "perhaps a greater sense of urgency," CFO Jennifer Piepszak said Thursday at a virtual investor conference, according to Bloomberg.
"There are businesses like asset management where scale matters even more than it did a year ago," Piepszak said. That may refer to increased competition — particularly from Morgan Stanley, whose $7 billion October move to buy fund manager Eaton Vance would nearly double the investment bank's assets under management.
JPMorgan's latest prompt to grow asset management comes during a week when Wells Fargo, in the interest of cost savings, cut bait on its own asset-management unit, selling it to two private-equity firms — GTCR LLC and Reverence Capital Partners — for $2.1 billion.
Because of JPMorgan's size, it is banned from buying another U.S. bank. But at least one regional bank — which is permitted to enter into a splashier M&A deal if it wanted — said this week it would prefer not to.
"We remain very interested in bolt-on acquisitions, nonbank opportunities," John Turner, CEO of Birmingham, Alabama-based Regions Bank, told American Banker on Wednesday, calling larger-scale bank deals "disruptive" and "often times not successful."
Turner said he preferred lower-key maneuvers, such as the bank's acquisition last year of equipment-financing company Ascentium Capital, whose back-end technology helped Regions facilitate lending.
That stance by the CEO of a $147 billion-asset bank marks a contrast with $142 billion-asset M&T Bank's move this week to buy $63 billion-asset People's United Financial.
JPMorgan's Piepszak said Thursday there are "other businesses where the need to move quickly and to innovate quickly to keep up with competition is certainly accelerating." Her comments appear to echo JPMorgan CEO Jamie Dimon's recent troll for ideas. "Asset management, my line is open," he told an interviewer in December when asked which segment of the bank could best be bolstered by an acquisition. "It might be software. It might be fintech ... It might be something overseas," Dimon said. "If you've got brilliant ideas, give me a call."
Then again, it might not be international. JPMorgan is phasing out its private-banking business in Mexico and referring clients to BBVA Mexico, Bloomberg reported, citing an anonymous source. The move is not unfounded — the bank wound down its local wealth-management business in Brazil last year and referred clients to Banco Bradesco.
JPMorgan will, however, continue to maintain investment banking, trading and treasury services in Mexico and serve clients from the country through its platform outside Mexico, Bloomberg reported.
Still other banks are meeting clients where they are. Merrill Lynch plans to double, over the next few years, its 20 Florida-based teams that cater to individuals with more than $10 million to invest, Merrill Lynch Wealth Management President Andy Sieg told Bloomberg.
Merrill has added more than 9,300 new clients in Florida in the past four years, the wire service reported. And while some of the most recent transplants may have chosen to relocate because of the coronavirus pandemic, Sieg said he thinks, much like the Silicon Valley boom decades ago, the shift in wealth may be longer-term.
"There's nothing more powerful in wealth management than demographics," he said, noting the prime earning years of many transplants. "This is a long-cycle business."
Parent company Bank of America, however, cut employees this week in other segments of its business — particularly, in its global banking and markets division, Bloomberg reported Thursday.
The headcount reduction, in a sense, heralds the end of an era. Bank of America was quick to board the "no-pandemic-layoffs" wagon when Morgan Stanley CEO James Gorman last March said his bank would retain its employees through the coronavirus crisis. Since then, one by one, banks resumed staff cuts: Wells Fargo in August, Citi in September, Goldman Sachs and JPMorgan in October — though the latter made no explicit promise to maintain staffing levels.
Morgan Stanley, too, is expected to weed through some redundancies once its Eaton Vance deal closes — a prospect set for Monday, Bloomberg reported.
Other banks are reversing pandemic-driven policy shifts. Capital One has begun to increase borrowing limits for certain existing customers with prime and subprime credit scores, CEO Richard Fairbank said Wednesday, according to Bloomberg. The move, a reversal from the borrowing-limit cuts the company instituted in August, are meant to jump-start growth.
Citi CFO Mark Mason, meanwhile, told an investor conference this week that his bank is mapping out a business plan that could include fewer business lines, expansions of remaining units and better alignment of departments. The news comes less than a week after Bloomberg reported incoming Citi CEO Jane Fraser is considering divesting some retail banking units in South Korea, Thailand, the Philippines and Australia. The bank last month consolidated two wealth-management units into one global division.
