US Banker - October 2009

SALLIE KRAWCHECK HEAD OF GLOBAL WEALTH AND INVESTMENT MANAGEMENT, BANK OF AMERICA CORP.

CECE SUTTON MANAGING DIRECTOR, HEAD OF RETAIL BANKING, MORGAN STANLEY Age: 51 Favorite pastimes: Riding my horses and showing in dressage competitions Children: Two (ages 24 & 29) Last book read: House of Cards Last movie seen: “Mama Mia” Charity most active in: The United Way One thing on “bucket” list: Earn my Gold Medal in Dressage Top non-business concern: Health care costs

THE

25 WOMEN TO WATCH

1SALLIE KRAWCHECK Few women in banking draw as much attention as Sallie Krawcheck.

A mainstay on lists of powerful women, Krawcheck joined Bank of America Corp. in August to take over its brokerage and wealth management operations. She will play a critical role in maximizing profits from BofA’s purchase of Merrill Lynch, which in turn could raise her stature within the company.

Krawcheck is widely perceived to be in the running to succeed Kenneth Lewis as the $2.3 trillion-asset Charlotte company’s chief executive.

Krawcheck, 44, has long possessed a certain celebrity aura, gaining prominence and respect first as the chairman and CEO at Alliance Capital Management’s Sanford C. Bernstein & Co. and later running the global wealth management division at Citigroup Inc.

Her meteoric rise seemed to end after Citi CEO Charles Prince was forced out in 2007; she left a year later after a reported rift with Prince’s successor, Vikram Pandit.

Frank Barkocy, the director of research at Mendon Capital Advisors, says the independ-ent-minded Krawcheck has a chance to firmly re-establish herself within the industry in a new, though familiar, role. “She is starting back at the same level, if not a higher, than the one she left,” he says.

Krawcheck manages 14,000 brokers and oversees a division with more than $700 million in assets under management, and she will have to strike a balance between the divergent cultures at Merrill Lynch and Bank of America while keeping defections to a minimum.

A day after she walked into the New York office, Dan Sontag announced his retirement as the head of the company’s wealth management unit.

“She has a huge job ahead of her to restore morale at Merrill and stem the bleeding of key sales people,” says Marshall Front, the chairman of Front Barnett Associates, a Chicago investment firm.

Krawcheck clearly sees herself as a bridge between the two cultures, making that point clear in a video issued to the brokers soon after her arrival.

“I’m a southerner by birth, but a northerner for some number of years,” she says. “What I’m not going to do is turn this into a place I’ve been before. Those are great institutions but this is a fantastic business.”

In September 2008, the Federal Reserve Board approved Morgan Stanley’s application to become a bank holding company. The investment bank highlighted its new access to the Fed’s discount window “and other funding opportunities.” Morgan Stanley’s Utah-based industrial bank became a national bank. The company vowed to expand the retail banking services offered to its retail customers and build its core deposits from an Aug. 31, 2008 base of $36 billion.

Then in November of last year, it announced the appointment of Cece Sutton as president of the new retail banking group. Bank deposits grew to $46.8 billion by the end of the first quarter of 2009. By the end of June deposits had more than doubled to $105.7 million.

A lot of that growth was the result of the completion of the Morgan Stanley Smith Barney joint venture, but Sutton had already been building Morgan’s retail banking business organically, and plans to both hire staff in New York and Charlotte and use Morgan Stanley Smith Barney offices as touch points from which to market an array of existing and new retail products to the joint venture’s clients.

“Cece is a natural leader who digs into the details and really understands the products,” says James Gorman, the chairman of Morgan Stanley Smith Barney. “She has an operations mentality and doesn’t mind getting dirty under the fingernails.”

Her area of oversight reflects the breadth of responsibilities Gorman’s comment suggests. Sutton is responsible for building all aspects of retail banking for the firm’s customers, including deposits, loans, the credit and debit card business, and mortgages. She was recently handed responsibility for managing Morgan Stanley’s trust company, as well. The retail banking arm is about to introduce jumbo mortgages, home equity loans, and tailored lending, Sutton notes. It’s also delving into middle-mar-ket and small-business lending.

Analysts speculate that a deal would be the logical next step but for now Sutton is talking about a focus on the existing customer base. “We’re building business with these customers,” she says. “We started with some very fundamental products, creating a retail operation from scratch, adding all the infrastructure and IT. After a great early start, now we’re working toward a full banking product line-up for one of the largest wealth management bases in the business.” —Joseph Rosta