The chief financial officer plays a number of roles at a bank. One is serving as its “voice,” answering questions from analysts and shedding light on the bank’s strategy, while a broader audience scrutinizes the comments.
At M&T Bank Corp., that responsibility now belongs to Darren J. King, a low-key, 46-year-old native of Sarnia, Ont. He was recruited to M&T in 2000 for a different position and has climbed the ladder, becoming the CFO starting in May.
The public-oriented role is a change for someone like King, who was accustomed to communicating with mainly an internal audience at the bank. But he had an able guide in Rene Jones, who served as CFO for 11 years before he was recently promoted himself.
On his way up to CFO, King served as Retail Banking executive, where he oversaw business banking functions and the branch and ATM network. And he still draws on the strategic thinking he applied during his time at the consulting firm now called Oliver Wyman, working from its Toronto office. When he decided to move from consulting to banking, M&T was new to him. But through his research, he said he was impressed by its ownership structure, Robert Wilmers’ track record as chairman and CEO, and investor Warren Buffett’s financial stake.
Jones said King “is another great example of the depth and breadth of our management team at M&T.”
“Not only does Darren possess a deep understanding of how M&T Bank succeeds in the communities we serve, but he has demonstrated a clear commitment to our customers, employees and shareholders alike, which will serve the bank well as we continue to move forward,” Jones said.
King is serving as CFO at a time when M&T, which had assets of about $125 billion as of March 31, is preparing to take advantage of the market disruption caused by KeyCorp’s deal for First Niagara Financial Group. The Clarence resident talked about his goals and expectations for the job:
Q: What experiences from consulting did you carry over to banking?
A: One of my first clients was in financial services. I’ll never forget sitting down with someone, probably a lot like me now, who pretty much said, “I’ve got underwear older than you, what are you going to teach me about this business?”
And it became clear that you couldn’t just be a smart person and be a generalist, and be effective. You needed to start to build some expertise.
So because I had an interest in finance, that became a natural. And very early on in my consulting career, I specialized in the financial services world, and really it quickly became banking.
Q: How do you see the CFO’s role at a bank like M&T?
A: There’s probably three broad categories that I would put things into.
First is just kind of the basics. We’re the financial reporting and accounting function for the bank. … It’s the part that I think everyone takes for granted, but it’s a must-have. It’s like when you get on an airplane: You assume you’re going to get from A to B in one piece, and then you forget about it.
Part two is, the CFO role tends to be the spokesperson for the bank. A big chunk of my role is being the external face of the bank. It could be with the stockholders and the analyst community. It could be just within the public, since oftentimes you’re the one that gets quoted and gets asked for input. You start to become a persona of the bank and a representation of the culture and the quality of the bank.
The third part is, and I think this goes all the way back to my roots, to understand the performance of all divisions of the bank, and to question and cajole and hopefully inspire to continue to improve their performance, but I think to do it in a way that’s not accusatory, but more collaborative.
Part of our job in finance is to be stewards of our shareholders’ money and to invest it, if you will, in the places of the bank that are going to generate the combination of the best growth and the best return, and that’s business units. So helping prioritize where we invest people and capital to continue to grow the bank and earn a return for the shareholders.
Q: What impression did working in business banking make on you?
A: It’s basically a bank within the bank. You have all functions within our business banking, from product design and pricing to credit approval to ongoing service and collections. From that experience, it was like running a bank, but a small piece of it.
From a customer perspective, what was most interesting and most rewarding was to be able to spend time with customers, learning how they built their business and seeing the pride that they have in what they’ve built, because it provides for their family, it provides education, it provides for their retirement.
You also see how they feel about their employees, because they can see that they’re providing opportunities for their employees, and there’s just some real ingenious people out there that have come up with neat things. And when you get to see the creativity and how they put that into practice and how they earn an income from it, it’s inspiring.
Q: How have you seen customers’ use of branches change over time?
A: My view on that whole thing, and when I was in retail, is that from my perspective, there were will be less branches in America, but we will not be branchless any time soon. … The biggest thing that changed people’s use of non-branch was really image capture at the ATM, when someone could put in a deposit and they could actually see a physical printout of the check on their receipt, and the ATM image technology allowed the device to count the currency that was deposited.
That gave people more confidence to use the device. And the great thing about the ATM is you can get credit for your funds later into the day than you can when you go through the teller, just because it’s open longer.
Q: What advice has Rene Jones given you?
A: Rene has been great as we’ve gone through this transition. He’s been helpful going to the various analyst meetings and investor conferences within the first 90 days. Watching how he interacts with that group, how he responds to questions. So he would respond to some, I would respond to some. And after, we’d de-brief and he’d say, “You know, I might change the way you respond, and here’s a different way to think about it.” … Having him available with me along the way has been very helpful.
Q: How can M&T capitalize on Key’s deal for First Niagara?
A: We saw this once before when HSBC (upstate branches) went to First Niagara. I think anytime there’s change and uncertainty, customers aren’t sure what to do. Some will wait and see, others will say, “You know what, I don’t like the uncertainty, so I’ll go do something somewhere else.” And if that’s the way they feel, we’ll be there to help them, like we were last time.