JPMorgan shuffles top retail bank executives
NEW YORK (Reuters) -- JPMorgan Chase & Co shuffled several retail banking executives, signaling Chief Executive Jamie Dimon's determination to rebuild the bank's profits and elevate in-house talent to high-profile roles.
In a statement released on Tuesday, the bank said retail banking chief Charlie Scharf was moving to the company's private equity arm and that other senior executives were taking on additional responsibilities in his former division.
Todd Maclin, 55, chief executive of JPMorgan's commercial bank, will continue in that position and also have responsibilities for the company's branch network, consumer franchise, small-business banking and private banking business, according to the statement.
Gordon Smith, 52, CEO of card services, will take on responsibility for the company's auto finance and student lending business, on top of his current role.
Dimon, 55, talking to Reuters in an interview after the announcement, said the changes should contribute to his push to raise the bank's profits. "This should help us," he said.
"Sometimes it is good to have a fresh pair of eyes looking at things," Dimon added.
Dimon said Scharf, 46, had told him a year ago that he wanted to do something different at the bank. "It was his decision to go, and when that happens I have to figure out who is going to do his job. It takes a while to get all of the ducks in a row."
The businesses that Scharf was responsible for will now be overseen by Maclin, Smith, and Frank Bisignano, Dimon's chief administrative officer whom he assigned in February to fix the retail bank's mortgage business.
In a memo to staff, Dimon said Scharf "will continue to work with our consumer team to help transition the business and assist in any way possible."
The shifts come as JPMorgan tries to strengthen its retail banking arm, which is being hurt by low demand for loans and hit by growing regulatory demands that will squeeze profits.
The retail financial services segment fell the furthest short of its profit goals of any JPM segment in 2010, with a return on equity of 9 percent compared with a target of 30 percent, according to a report by analyst Christopher Mutascio of brokerage Stifel Nicolaus.
The bank also said its investment banking head, Jes Staley, will assume oversight of its business outside of the United States, taking over from Heidi Miller, 58, who will retire early next year.
Dimon said the moves were not an explicit part of the company's preparations for his eventual successor, but he added: "It is always good to cross-train people."
MORTGAGE CHIEF PUSHED OUT
The bank said in a separate memo to staff on Tuesday that its chief of home lending, David Lowman, would be leaving. He had been pushed aside in February after the bank racked up billions of dollars in losses on mortgages and became mired in litigation over foreclosures.
"Dave Lowman and I have decided he will leave the firm," Bisignano said in the memo.
Lowman joined JPMorgan from Citigroup in 2006. During his tenure at JPMorgan, the bank picked up bad mortgage assets through its acquisitions of investment bank Bear Stearns & Co and retail bank Washington Mutual.
Under Lowman, the home lending unit was so disorganized that the bank seized homes of at least 33 U.S. military servicemen on active duty, violating federal law and prompting Dimon to apologize at the company's annual shareholder meeting. The bank has said it is forgiving those loans.
Lowman could not immediately be reached for comment on Tuesday.
Lowman appeared before congressional committees last year where he was chastised for his division's refusal to cooperate with borrowers and modify mortgages. Lowman said in a June 2010 hearing that the bank was understaffed but was adding employees to work on problem mortgages. In a hearing in November, Lowman acknowledged mistakes in foreclosure paperwork and said the bank was cleaning up errors.
JPMorgan and other large banks are in negotiations with the Department of Justice and state attorneys general to settle probes into mistakes in foreclosures.
The bank recorded $1.1 billion in litigation expenses in the first quarter, primarily because of mortgage-related claims. It also marked down the value of its mortgage-servicing contracts by $1.1 billion because of increased costs and booked $1.1 billion of expenses for losses on its residential real estate portfolio.
(Editing by Maureen Bavdek, Matthew Lewis and Steve Orlofsky)
- Malaysia military tracked missing plane to west coast: source |
- Malaysia air probe finds scant evidence of attack: sources |
- Ukraine forms new defense force, seeks Western help |
- UPDATE 1-Missing Malaysian plane last seen at Strait of Malacca-source
- Freescale loss in Malaysia tragedy leads to travel policy questions