JPMorgan Splits Its Retail Unit Duties Among Executives as Scharf Moves On
The unit, which has more than tripled to 5,300 branches in nine years under Scharf, is grappling with soured mortgages in the wake of the U.S. housing slump. It generated a $208 million loss in the first quarter on revenue of $6.3 billion. Scharf, 46, will become a partner at JPMorgan’s private-equity arm, the bank said yesterday.
Chief Executive Officer Jamie Dimon, 55, said the changes were part of a “normal maturation” of management at the New York-based bank. “You can’t have a company with an operating committee of 15 people and think it’s not going to be changed,” he said in an interview.
Scharf lost his position on the operating committee. His duties were divvied up among commercial banking head Todd Maclin, who will oversee the bank’s branch network, small business lending and marketing; card services CEO Gordon Smith, who will run student and auto lending; and Chief Operating Officer Frank Bisignano, who remains in charge of home lending, a role he took in February, JPMorgan said in a statement.
“I’ve had a bunch of big operating jobs in my career. I’ve been CFO of big divisions of companies and a public company. I’ve run 120,000 people,” Scharf, said in an interview yesterday. “I’ve never done something like this.” He will report to Dick Cashin, who heads JPMorgan’s private-equity arm, One Equity Partners.
Scharf is a “friend and trusted adviser,” Dimon said. “That will be true until the day I die.”
Maclin, 55, said he plans to build on Scharf’s work in expanding JPMorgan’s branch network by 350 to 400 new locations a year with emphasis on California and Florida.
“There isn’t a place where we lack the scale to complete our growth organically,” he said yesterday in an interview.
Maclin “is well-liked by the investment community and his commercial bank’s results have outperformed peers during the downturn,” Jason Goldberg, a senior analyst at Barclays Capital, said in a research note to clients last night.
The bank officially announced Heidi Miller’s departure in 2012 after working with Dimon for nearly two decades. Miller, 58, who most recently headed international operations, said she plans to take some time off before planning her next move.
“I’ve worked for 35 years and have really never taken time to step back and want to give myself that privilege,” she said yesterday in an interview. “I’m not retiring. There will be a next stage, I just don’t know what.”
Investment bank CEO Jes Staley, 54, will take on Miller’s international duties.
“Given his background in international finance, given the size of the business he runs globally today, he’s the right person to orchestrate that across the lines of business,” Miller said.
The company announced in a separate e-mail to employees yesterday that it ousted mortgage chief David Lowman after the bank overcharged active-duty military personnel on loans and improperly foreclosed on other borrowers.
“Dave Lowman and I have decided he will leave the firm,” Bisignano, 51, said in the memo.
JPMorgan has been taking steps this year to repair its mortgage unit, which posted at least $3.3 billion in losses during the first quarter. Lowman, 54, who ran home lending since leaving Citigroup Inc. in 2006, was directed in February to start reporting to Chief Administrative Officer Bisignano. It hired Cindy Armine, Citigroup’s chief compliance officer, last month as chief control officer of home lending.
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