It’s a change that is the new normal for banks as they grapple with a host of new regulations and capital requirements in the wake of the financial crisis, according to analysts.
In Citi’s case, “compliance staffing is up by a third, at a time when the bank has been shrinking assets and shrinking people,” said David Hilder, analyst at Drexel Hamilton.
“I don’t sense any desire on the part of regulators to reduce the amount of work that banks have to do on compliance and regulation,” he said.
Dick Bove at Rafferty Capital agreed.
“One of the things that American industry is complaining about most is the excessive regulatory pressure coming out of Washington,” said Bovel. “In banking, its certainly more vigorous than any other industry.”
The disclosure marked the first time that Citi/quotes/zigman/5065548/delayed/quotes/nls/cC+0.15% has put a firm number on how much it is ramping up staffing levels to address the increased pressure on the industry. The figure is equal to about 13% of the bank’s total headcount of 244,000 at the end of the second quarter.
CEO Jamie Dimon said recently the bank will hire 13,000 new staff in compliance, audit and other areas by year-end. The bank expects to hire up to 2,000 outside consultants, according to media reports.
Bank of America Corp./quotes/zigman/190927/delayed/quotes/nls/bacBAC+0.12% CFO Bruce Thompson said the number of audit staff at his bank has roughly doubled in the last three years. Bank of America’s overall headcount was down 9% in the first quarter,mostly due to cuts in the mortgage department.