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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Rajinder Singh0:00
A lot of change in ten years. Ten years ago it was probably the darkest hour of banking if you go back to 2009. So when we started the bank, it was probably the best time, the perfect time to start a bank. Most banks were trenching, nobody wanted to lend, everybody was worried about their existing loan portfolios. So we were able to come out of the box and grow quite rapidly. We went public in 2011, and here we are 10 years later celebrating our 10-year anniversary. It's been an amazing business expansion. It's lasted for 10 years. What's good for the economy is generally good for banks, so we've enjoyed it, and we hope to keep enjoying it. But the thing that we worry about as a bank is how long will this carry on, and where is the end of this business cycle? Is it a year away or two years away? Hopefully it's ten years away.
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Interviewer0:45
Well, that's just a cyclical factor. What about the structural factor? The size of bank you are, the big banks have really grabbed a lot of market share. We talk about the BB&T and SunTrust merger, which is very much in your backyard in the Florida space. One big reason they said they needed to do that was so they could pool the amount they're investing in tech. The big guys each spending ten billion dollars each. Can you compete with them?
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Rajinder Singh1:10
Yes, we can, and we do it every day. I think of banking eventually evolving to a sort of a barbell structure of this industry. You're going to have very large behemoth universal banks like JP Morgan, Wells Fargo, BofA, and so on, and you're going to have more specialized banks like us, which will cater to one or two or three niches and specialize and earn our economic return in those markets. Banks like us will never be universal banks and do everything for everyone. We'll do a few things for a few people, but we'll do them very well. That's what eventually the industry will evolve to, and it's happening with the SunTrust BB&T merger as the latest example. There are six thousand banks still in America, which is kind of unique. No other country has that many banks. Eventually consolidation will end up with a structure where there are very large banks and highly specialized banks.
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Interviewer2:04
I'm sort of curious about what you said about the business cycle. What's your point of view right now, given the loan activity you see, the capital markets activity? We had this yield curve inversion that people are no longer talking about. Where are we?
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Rajinder Singh2:17
Conflicting signals is what I would say is the story. When we look at our loan book and we look at our clients, how they are doing and how their businesses are doing, we feel very encouraged that everything is good. But when we look at our Bloomberg screens and what's happening in the marketplace, there are signs that give us some pause, especially fourth quarter of last year. There were a lot of signs in the capital markets which pointed to trouble down the stretch, but not when we see what's happening in the real economy, not when we talk to our borrowers.
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Interviewer2:59
And what about trade? Are the corporates, the small medium-sized businesses you lend to, nonplussed about trade, or are they very concerned?
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Rajinder Singh3:05
I know there will be some impact from the trade disruption if it gets beyond what it is today. We are based in South Florida and New York. Both economies do have a big element of freight, and it will be impacted. Will it be big enough to cause a recession? I'm not sure. I think it'll be fine. I think it's more noise at this point of time than real trouble.
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Interviewer3:30
Quick question on the administration. I know Wilbur Ross, the Commerce Secretary, was a big shareholder until very recently. The administration came in saying they wanted to deregulate, especially for small and medium-sized banks. Should that happen?
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Rajinder Singh3:46
I would answer that in two ways. One, there hasn't been any major deregulation. It's not like Dodd-Frank has been reneged on or pulled back. There have been some changes in regulation, like the Crapo bill last year. But what's more important than changing regulation is actually the attitude of regulatory bodies towards businesses, towards private capital, and that has changed and has become much more reasonable. So I would say the expectations from regulators from the banks they're regulating haven't changed much, but the way they're engaging with banks has changed for the positive in a very material way, and that's good news.
