Magazine article American Banker

Schwab Intends to Consolidate U.S. Trust Charters

Magazine article American Banker

Schwab Intends to Consolidate U.S. Trust Charters

Article excerpt

Charles Schwab Corp.'s chief financial officer said Tuesday that, to centralize operations, it will consolidate bank charters at its U.S. Trust unit this year.

Christopher V. Dodds said the private bank's "six or seven" charters would be reduced to two by yearend. Speaking at an investor presentation in New York sponsored by Citigroup Inc.'s Salomon Smith Barney unit, he added that other changes are under way at U.S. Trust.

Last week the San Francisco company had announced that the unit's chairman, Jeffrey S. Maurer, would retire this Friday. A successor has not been named. Mr. Maurer, who has been with U.S. Trust for 30 years, resigned from Schwab's board and executive committee at the end of last year.

Mr. Dodds said that Alan J. Weber, the chief executive of the New York-based U.S. Trust, will oversee the charter consolidation. Before joining Schwab in October, Mr. Weber had been the CFO at Aetna Inc. He also spent part of his career at Citibank.

Schwab purchased U.S. Trust, a 150-year-old private bank, in 2000, before the bull market ground to a halt. The idea was to provide cradle-to-grave investing -- getting Schwab's self-directed investors to graduate to U.S. Trust when they reached a certain wealth level.

At the time observers questioned how well the discount brokerage's culture would combine with the upscale bank's, and Mr. Dodds suggested that there have been a few problems.

"U.S. Trust has probably been a bit behind where we have wanted them to be," he said. …

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