- A reorganization that Huntington Bank is undergoing, with the aim of consolidating three business units into one, will help the $182.9 billion-asset firm rein in expenses and increase revenue, CEO Steve Steinour said at an investor conference Wednesday.
- The plan involves combining the bank’s retail and business banking unit and its vehicle finance arm with its wealth management, private banking and insurance segment. Under the restructuring, which is expected to take place in April, all operations will fall under two units: consumer and regional banking and commercial banking, according to the bank.
- Huntington’s new consumer and regional banking segment will become a fully integrated organization, inclusive of all consumer business banking products and services across the bank, Steinour said Wednesday.
Huntington’s structural revamp represents the bank’s focus on its “most critical priorities,” Steinour said.
“We’re committed to local,” Steinour emphasized during Wednesday’s presentation. “By bringing the decision-making and customer service closer to our customers and the communities across our footprint, the change will double down on that commitment, increasing the coordination of our business units on a regional basis to better serve customers.”
The initiative will usher in “enhanced agility and speed of execution,” which the bank believes will support greater growth opportunities over time, he said.
The reorganization will also help the Columbus, Ohio-based bank derive more revenue from its wealth management division, a unit Steinour identified as a “big growth area.”
“As we were working through the strategic planning process, beginning last summer, we started asking ourselves, ‘Are we as aligned as we’d like in our wealth businesses, so that we’re maximizing opportunities?’ he said. “We are under-penetrated. And while we’ve made some progress, it’s not coming fast enough, from my perspective. This alignment helps us significantly in that regard.”
As Huntington looks to cut costs through reorganization, the bank also aims to trim expenses related to personnel and its branch network.
Huntington launched a voluntary retirement program last month, aimed at middle- and senior-level employees, Steinour said. It’s the first time the bank has offered such a program, he noted, adding the firm is yet unable to project results.
Huntington also consolidated 30 branches over the last quarter, representing 3% of the bank’s total network, Steinour said.
“In our retail branch distribution network, we’ve got about 1,000 points of presence. They’re still very relevant,” Zachary Wasserman, the bank’s CFO, said at the conference. “But over time, there’s an opportunity to pluck the least productive nodes out of that network and generate net economics, and that’s what we’re doing.”
The efficiencies generated from the bank’s branch consolidation efforts help support reinvestments in digital offerings, as well as new branches in growth markets such as Colorado, Steinour said.
The bank plans to open over 20 retail branches in the Denver area over the next several years, Steinour said.