About Rajinder Singh
Rajinder Singh, Chairman, President and CEO of BankUnited, discussed the bank's 10-year anniversary and its growth since its founding in 2009, which he described as "the perfect time to start a bank." He stated that "what's good for the economy is generally good for banks" but expressed uncertainty about the business cycle's duration. Singh noted conflicting signals, saying that while the bank's loan book and clients appear healthy, market indicators give "some pause." He assessed that trade disruption would have some impact on South Florida and New York economies but called it "more noise at this point than real trouble."
Singh commented on the banking industry's structure, predicting a "barbell" evolution with very large universal banks and highly specialized banks like BankUnited. He noted that the U.S. has roughly 6,000 banks, a number he called "unique," and said consolidation is likely to continue. Regarding M&A, Singh described it as a "secondary strategy" for BankUnited, with the primary focus on organic growth. He observed that recent large acquisitions have not been "rewarded by shareholders," though he noted that two recent "mergers of equals" saw positive stock performance, while cautioning that such deals are "especially hard to pull off." On regulation, Singh said there has been no major deregulation of Dodd-Frank but that the "attitude of regulatory bodies" toward businesses has become "much more reasonable."
Source: AI-verified profile updated from Rajinder Singh's recent appearances.
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Transcript (9 segments)
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Reporter0:00
Use this conversation obviously that was David Solomon and prosperity but also at the conference was rich interesting. BankUnited CEO with branches in Miami and New York talked about potential obstacles to M&A in the acquirer's stock price. Take a listen.
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Rajinder Singh0:17
Expansion has been ten years in the making now. So maps would suggest that at some point it will happen. We always worry about that. There is a fair amount of geopolitical concerns, not things that affect us directly or our clients directly, but indirectly. There's still a lot of noise around what happens with China and trade policy, and then there are other geopolitical issues which could impact the economy. We're also going into an election year next year that will also raise the temperature on that front. And also the Fed's policy of tightening over the last three years now has had an impact. Where the Fed goes from here, it looks like there is a pause, but if they tighten more, that will also eventually have a chance, there's a probability that also causes some stress in the economy.
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Reporter1:05
What you might call perilous markets. Here in the Florida market, you find you're competing against the majors nationally as well. What are the risks associated with competing on those levels?
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Rajinder Singh1:15
I would say one of the best markets in the country: Miami and Manhattan. Give me that combination any day. They're vibrant markets, they're doing very well. Manhattan never really went through much of a downturn in 2008, 2009. Miami did, but Miami has been such a rebound story it's hard to believe. So both markets are doing very well. Nationally, we do some business in certain specific times of lending across the country, but we're not seeing those signs of weakness. Where the weakness might be are places that we're not players. And you know, there was a couple of years ago there was some stress in the energy sector. Today there's some stress in the agricultural sector given the tariff issues with China. But for the most part, I would say 95% of the lending landscape looks very healthy, and our markets especially look very strong.
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Reporter2:04
Potentially a big year or two for consolidation. Who buys who? Gets both?
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Rajinder Singh2:14
There are almost 6,000 banks in America, which I don't think there's any country which has 6,000 banks. That has to do with the way for state banking was, and the consolidation gave us a deregulation in the mid-80s and has been going on since. The downturn consolidation really slowed down for a number of reasons. There is still a very strong case to make for more consolidation in the industry. However, if you look over the last three or four years, the few deals that have actually happened have not been rewarded by shareholders. If you look at the stock price performance of acquiring banks over the last three years of deals over, let's say, a billion dollars, almost every one of them is lacking. Now there are two deals that were announced earlier this year, and they were different kinds of deals. They were not acquisitions, but they were termed as a merger of equals, and the stock performance of the buyer has been surprisingly, not surprisingly, it's been very good. So there is a lot of talk that that is the new model for M&A. I'm not too eager to call that the new model because those deals are especially hard to pull off the day after you announce those deals. But that's something which could fuel more M&A over the course of the next couple of years.
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Reporter3:29
Are you saying you're not looking to acquire?
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Rajinder Singh3:31
Our strategy clearly has been that while M&A is always on the table, it's a secondary strategy. Our primary focus is always on organic growth. If you can build it, don't buy it. Be patient. Don't use shareholder capital just to get there quickly. Just be patient and build. That's what we've done over the last 10 years. You need to be open to being acquired. Well, we always are. We're a public company, we're always there.
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Reporter3:59
That was part of my conversation with Rajinder Singh, BankUnited CEO, at the RBC conference. So it looks like it might be a big year for consolidation.
