Stifel CEO Weighs In On Acquiring Barclays' U.S. Wealth Management Unit

While larger investment banks have faced headwinds from all the sides post the financial crisis, the going hasn’t been as tough for smaller ones like Stifel Financial Corp SF. As was demonstrated by the company’s announcement on Monday that it has agreed to buy U.S. wealth and investment management unit of Barclays PLC (ADR)BCS, which itself is mostly made up of the erstwhile brokerage arm of Lehman Brothers.

Ron Kruszewski, Stifel CEO, was on CNBC recently to weigh in on the deal.

A Great Business

“Wealth management is a great business and I think that we certainly are going to invest in it in every chance we can so long as we can do it on an accretive basis,” Kruszewski said. “What’s really going on in wealth management though is that in the end a lot of ways it’s not conducive to some of the global SIFI (systemically important financial institution) regulations that are coming down- variable pay- there are a bunch of things that’s just making it difficult for those models to succeed in the huge banks and that’s our opportunity.”

An Opportunistic Strategy

Kruszewski was asked why is Stifel going on acquisitions and building up whereas the financial industry overall has been paring down. He replied, “At the financial crisis our revenues were $700 million, they are probably approaching $2.5 to $3 billion and the strategy is, is that what’s coming out of the abyss of the financial crisis is firms like Stifel that are growing into it. So, it’s really an opportunistic strategy. We are having a lot of fun, we are growing like crazy, but we are growing shareholder value as well.”