Ted Pitt's Banking Career 1962-2003

 

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.