Banks may face “fiercer” competition in 2014 as an improving economy fuels more business spending.
“One of the biggest challenges is that our competitors are getting healthy again,” said Paul O’Mara, senior vice president at the Irvine office of Wells Fargo Bank.
He said his commercial banking division is budgeting for “double-digit growth again” after two years of increased lending.
Community banks also will benefit from “strong loan demand [and] low delinquencies,” said Ash Patel, chief executive of Commercial Bank of California. He said his clients are more “confident to increase their infrastructure investment.”
Financial services jobs will grow at about 1%, according to a forecast by Chapman University. Some of the gains could come from national financial advisory firms with offices here, including Edward Jones.
The firm is “aggressively hiring” and training, in part to close a “talent gap” in the sector brought on by a wave of retirements and aging baby boomers adding to its client base, and will add 62 advisers in OC to an existing base of about 120, according to Betty Chin, talent acquisition manager.
Macroeconomic factors could pose “increased volatility” and business opportunities for investment managers, according to Mark Van Mourick, head of Irvine-based wealth manager Optivest Inc. He said multifamily offices are likely to “get more business” as investors try to “spread assets across more managers.”
• PERSON TO WATCH: BILL GROSS
We’ll be watching Gross as he maneuvers hundreds of billions of dollars in bond funds for Pacific Investment Management Co. as the Federal Reserve starts winding down its bond-buying program in January.
Gross is cofounder and co-chief investment officer at Newport Beach-based Pimco, which manages nearly $2 trillion in assets and is due to move into a new headquarters in Newport Center next year. His Total Return Fund is the biggest bond fund in the world, with about $244 billion in assets. It’s down about 1.54% over the past year.
He has been focusing more on short-term debt, with expectations that bonds with longer maturities would lose value as interest rates rise. He has said the Fed is likely to keep the rates at near zero through 2015.
It remains a question whether Gross, 69, will take steps toward retirement in the coming year. He has designated Pimco Chief Executive Mohamed El-Erian his “heir apparent” in public comments but hasn’t given dates for his personal plans.
• COMPANY TO WATCH: SAIGON NATIONAL BANK
Saigon National Bank has yet to show profit since it started in 2005, and it remains uncertain how it will survive the steep losses and bad loans that keep it under restrictive orders from the Office of the Comptroller of the Currency.
The Westminster-based community bank, which primarily serves the Vietnamese-American community in OC, has about $48 million in assets, down 11% year-over-year.
The bank also borrowed $1.5 million from the government through the federal Troubled Asset Relief Program, issuing preferred shares against the loan. It has yet to make a single payment and seems to be in a Catch-22: Regulators concerned about capital levels have slapped a prohibition on any form of dividend payments, ruling out repayments on the TARP loan.
A recent report by the Treasury’s Office of Financial Stability indicates the bank has denied the federal agency’s requests to appoint “observers” to its board. Neither regulators nor the bank have commented on likely next steps.
PREDICTION:
Dong Il Kim, recently returned boss at US Metro Bank, will bring fresh investors and directors to help reset the struggling Korean-American community bank he founded in Garden Grove.
