Study: Western financial-services win 

Eyes may look to New York City rather than the West when the topic of hot financial services firms comes up, but Western companies actually provide better shareholder performance, a financial services strategy and risk-management firm said Thursday.

Mercer Oliver Wyman released the results of its five-year "Shareholder Performance Index" survey as it announced the creation of a San Francisco office, the firm’s third in the United States after New York and Boston. The office has fewer than five directors but plans to expand to between 30 and 50 people, according to Piyush Tantia, director of Mercer Oliver Wyman’s San Francisco retail and business banking practice. Clarence Koo heads the office.

Mutual fund firm Franklin Resources Inc. (BEN) of San Mateo ranked fourth among firms in the Western states for shareholder performance, scoring 18th among 244 U.S. firms and 17th among global large-cap firms with a market value greater than $10 billion. Wells Fargo & Co. (WFC) scored seventh among Western companies, 33rd among U.S. firms and fourth among global firms with market values greater than $50 billion. The global numbers were taken from 400 companies divided into market-value segments.

"Wells Fargo is a growth company and continues to do well across a number of our business lines. Wells Fargo was upgraded by Standard & Poor’s, and we stand as the only AAA-rated U.S. bank," said Chris Hammond, VP of business development in the Bay Area.

The top-performing Western financial services firms were Sterling Financial of Spokane, Wash., and Central Pacific Financial and Bank of Hawaii, both of Honolulu.

"The way this was done was simply looking at their stock performance, adjusted for volatility," Tantia said, adding that the report is not equity research or a substitute for a broker. "It doesn’t rank … on the quality of their business model pricing or any of those factors. It’s useful to consumers who are looking at investing in financial services stock. What they can do with this is look for [companies] who deliver consistent performance."

The Western firms’ performance outpaced that of the South, Midwest, and East, in that order. The companies benefited from regional economic growth, a focus on consumer and business banking rather than investment banks and universal banks, and growth in financial services in the West.

The firm predicted that increased financial service opportunities in Asia and among immigrant communities could help the region’s performance, as could a convergence of technology and financial services firms. But it said the housing market, subprime mortgage lending and takeovers could trouble performance.

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A daily newspaper covering San Francisco, San Mateo County and serving Alameda, Marin and Santa Clara counties.
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Tuesday, Jan 22, 2019


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