Ted Pitt's Banking
Career 1962-2003
Ted started his
banking career in January 1962 at
Southern Branch, Queen street, Brisbane Australia as a mail clerk
After a year he was
transferred to the George St Branch to run the Mobile van unit to collect weekly
passbook savings from suburban Catholic schools, usually 10 the 25 cent
deposits.
He was then
transferred to ANZ Mackay Queensland and was appointed as head teller. He held
this position during the currency
conversion from Pounds to dollars on 14th February 1966.
His next assignment
was to ANZ Cairns in North Queensland where he was once again Head Teller and
was responsible for all currency distribution to North Queensland
He resigned from
the ANZ bank in January 1968 to attend his brother Jeff's wedding in Surfers
Paradise in Queensland and the emigrate to Canada in March 1968.
In June 1968 he
started work at the Bank of Montreal in Toronto Canada in their executive
management development program , designed to bring British Bankers over to join
the Bank of Montreal.
He got the job
starting at Canadian $4800 a year, up from Australian $2400 a year, and was
able to work as he was a landed immigrant. He went on their executive
management program, took leave of absence to go to University of Western Ontario
to get his Economics Degree (1971) and Masters of Business Administration
(1973), completing both in 4 years.
Ted was able to use
the experience of the personnel director he met on a bus from Montrea to
Toronto to obtain leave of absence from the Bank of Montreal to do his studies.
He worked for them during the summer months and school breaks to pay for his
education. He was able to apply for government grants and scholarships and also
obtained a scholarship from the fraternity he joined, Sigma Chi. Bank of
Montreal also endorsed him to enter the Master of Business Administration
program, specializing in International finance.
He continued to be
interested in becoming fluent in French and requested the Bank to post him in a
French speaking branch in Ontario one summer to improve his French. He worked
at Hawkesbury branch on the Ottawa River, close to Montreal, renting a room
with a French family. He also studied French at Western in his first year. He also negotiated to take the summer of 1973
off to travel with three classmates to Europe and then to visit his family in
Australia. This part of his story will be expanded on at another time.
He commenced
working in September 1973 at the Head Office at Place d'Armes , Montreal in the International Department for Bank of Montreal after
graduation.
By the time he took
leave of absence, his salary had increased but not substantially as he had only
been working for them for eighteen months. He graduated in 1973 and they
offered him $8000 a year, but the going rate for MBA graduates was $11,000.
When they did not wish to consider this amount, he had to show them a competing
offer from another bank, which then led them to match the offer and agree to
post him in the International division in Montreal.
The first day of
his reporting to work in September 1973 he rode up in the elevator with Greg
Fast who had also been recruited from the MBA program at University of British
Columbia. He will play a part in Ted's career later on.
At that time,
banking was considered staid and old fashioned, mainly concentrating on
deposits and loans in the branch banking system. His classmates questioned
working in that industry after so much education. Ted had a vision that it
would change. Bank of Montreal was one of the oldest banks in the country,
opening its doors in 1817.
The Bank hired 50
MBA graduates from major Canadian and U.S. business schools, thinking they
would be integrated into the credit and branch banking system. Ted was assigned
to the North American Unit, reviewing credits from the U.S.A. He had to
"train" under the experienced credit officers and had a jump desk
attached to his trainer. The trainers found the young MBAs intimidating with
their calculators, cash flow analysis, and present valuing techniques. Both sides
had to learn to adapt and learn from each other.
The Bank was
overambitious with the number of MBAs hired and one presentation by a senior
executive, who had been hired from the Ford Corporation to shake things up. He said "look to the left and look to the right, one of
the people will be gone in six months!". That was a wakeup call for him
He noticed an
advertisement in a financial paper for an account manager for the Parisian
bank, Banque National de Paris, to be located in Montreal. He had been continuing
my French studies while at the bank and was doing reasonably well, so applied.
My friend Greg Fast also left Bank of Montreal to go to Citibank in Toronto,
along with Mike Love who was also a good friend. We remained friends after they
moved to Toronto.
Politics of Quebec
came into play. The separatist Parti Quebecois took power in 1979 and
passed language law 101 for corporations
doing business in Quebec which forced them to move the bulk of their activities
to Toronto. He felt that his banking career would be stifled and decided to
move to the Toronto office of the BNP covering the Multinational corporations.
The Toronto office
of BNP was much smaller and had very stiff competition from the strong Canadian
banks. His boss, Jacques Raven, was an American married to a Parisian lady and
was dissatisfied with the lack of autonomy of the office and moved to Solomon
Brothers in New York City.
As soon as Jacques
left for Solomon, Citibank made him an offer in 1981 to be the Bank Act
coordinator to enable Citibank to obtain a Schedule" B" (restictive)
bank license. After the licence was granted, he moved into Electronic Banking
in its early stages. It was innovative for the major Canadian companies with
revenues in U.S. dollars to access their U.S. dollar balances in real time in
NYC in time to reinvest them for the day. The prime interest rate at the time
was 21% as Regan was fighting runaway inflation after the Vietnam War.
After the
developing of Electronic Banking, he moved into what was called Financial
Institutions which was also considered boring with its correspondent banking
roots. All international banks wishing to trade in U.S. dollars have to have an
account in a U.S. Bank and settle foreign exchange transactions. It is the
largest credit exposure of the bank.
Having graduated
from Western, he went back each year to interview graduates to enter Citibank's
training program. Depak Rastogi was the Gold Medalist in 1987, i.e., top
graduating student. he interviewed him and could not understand why he would
want to join a bank when he could do anything. He was adamant. I thought he
would only last two years. He ended up as the Global head for Derivatives for
the bank.
One day Ted was
waiting outside the president of Citibank Canada's office to get a credit
approved for a Trust bank. Depak was also waiting to see him. They discussed the Trust bank's dilemma of lending
long and borrowing short (similar to the S &L crisis in previous years). He
said we could do a "Step up Swap" which would be a derivative which
would synthetically match the maturities of their deposits and loans...for a
fee.
This became a
successful product with Canadian banks as counterparties. Citibank considered
Canada to be part of the European division and Ted reported to Paolo DiVito in
New York who was responsible for Europe, Canada, Israel, Eastern Europe and
Russia. Paolo was impressed with the results and innovation with Canadian banks
and transferred Ted to head the New York office for his European division in March 1988
Ted ran the
European, Canadian, Israel and Non presence countries (where Citibank has no
branch) in Russia and Eastern Europe until March 1991. During that period he
travelled extensively to all of those countries. He escorted the the Vice
Chairman Jack Clark to all of the Eastern European countries an Russia in 1990,
before Perastrokia.
One of the largest
exposures of the bank was the Swiss Financial institutions, banks, private
banks and insurance companies. The
president of Citibank Switzerland requested Ted to head the Financial
Institutions in Switzerland, located in Zurich.
He grew the
franchise and continued in that function for 10 years until January 2000.
In 2000, He
returned to Citibank's headquarters in New York to head the Credit area
responsible for the credit exposure to North American banks. This was a period
of consolidation and Citibank's consolidation with Salomon Smith Barney, the
investment bank.
Ted was head hunted
by Swiss Re insurance to become a Managing Director of their investment bank,
Fox-Pitt, Kelton. He was responsible for transferring risk from the Major banks
to Swiss Re's balance sheet via credit derivatives. The business was successful
until in 2003 the Credit Rating Agencies felt that their exposure was affecting
their credit rating. Swiss Re exited the activity and Ted retired in June 2003.
