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Jax Daily Record Monday, Jun. 15, 201512:00 PM EST

Deutsche Bank growing in Jacksonville, cutting elsewhere

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by: Mark Basch Contributing Writer

A major global bank is continuing to expand in Jacksonville, despite an upheaval in its operations elsewhere.

Germany-based Deutsche Bank last week announced its co-CEOs are resigning, six weeks after they announced their “Strategy 2020” plan that included “reducing the number of countries or local presences by 10-15 percent.”

While company officials have not mentioned specific cuts, Deutsche Bank did say it would continue to invest in certain markets and, apparently, Jacksonville is one of them.

“We will continue to strategically invest in the region across all business divisions and infrastructure functions and further focus our efforts as an active member of the Jacksonville community. Jacksonville continues to be a critical component of our location footprint in the Americas,” Deutsche Bank spokeswoman Catherine Wooters said by email last week, repeating what she told the Daily Record in May.

Deutsche Bank opened its Jacksonville operations center in 2008 and has grown it to 1,700 employees, up about 300 in the last two years.

The Jacksonville center is Deutsche Bank’s largest U.S. operation outside of New York.

The Daily Record has reported the bank has been looking for new office space on Jacksonville’s Southside to consolidate its operations, but the company has made no final decisions.

Globally, Deutsche Bank has been under pressure from shareholders to improve its operations, and that is likely behind the decision of co-CEOs Juergen Fitschen and Anshu Jain to announce their resignations. Jain will resign June 30, but Fitschen will remain until Deutsche Bank’s annual meeting in May.

Meanwhile, John Cryan was appointed as co-CEO effective July 1 and will become the sole CEO when Fitschen leaves.

Cryan was most recently president for Europe for a Singaporean investment company called Temasek, and he has been a member of Deutsche Bank’s Supervisory Board since 2013.

Deutsche Bank’s stock had been falling since the Strategy 2020 announcement in late April but it rose $1.52 to $32.15 on the New York Stock Exchange last Monday after the CEO shake-up was announced. Deutsche Bank’s shares are traded in New York and in Germany.

 

JPMorgan hits new high

Another major global bank expanding in Jacksonville while it cuts elsewhere, JPMorgan Chase & Co., reached a record high last week.

The Daily Record reported last week that, despite talk of cuts in its branch network, the company is moving forward with plans to continue growing its Chase Bank network in the Jacksonville market.

While investors did not respond positively to Deutsche Bank’s announcement of cost-cutting, they apparently do like what they hear from JPMorgan Chase.

JPMorgan Chase’s stock rose $1.08 to $68.26 Wednesday, the first time the stock surpassed the $68 level, The Wall Street Journal reported.

“It’s unclear exactly what caused the bump, though the bank has moved past some recent regulatory settlements and is actively working to cut its costs,” the Journal said in a story posted on its website.

 

Little change in Fortune 500 in Jacksonville

The annual Fortune 500 list of the nation’s largest companies produced little change this year, as far as Jacksonville is concerned.

The same three Jacksonville-based companies that have been on the list for the last several years remained, with very small changes in position.

CSX Corp., with $12.7 billion in revenue last year, fell from 231st in 2014 to 240th this year. Fidelity National Financial Inc., with $9.2 billion in revenue, moved up slightly from 316th to 314th and Fidelity National Information Systems Inc., with $6.4 billion, moved from 426th to 422nd.

CSX has been on the list the longest, at 21 years. Fidelity National Financial has been on the list for eight years and Fidelity National Information, or FIS, which was spun off from FNF in 2006, has been on for six years.

The only other Jacksonville-based company on the Fortune 1000 list is Landstar System Inc., which moved from 786th to 719th with $3.2 billion in revenue.

Southeastern Grocers, the parent company of the Winn-Dixie and Bi-Lo supermarket chains, would likely have enough revenue to qualify for the Fortune 500 list. But as a private company, it doesn’t report its revenue figures.

The list is based on fiscal 2014 revenue.

 

CSX merger rumors continue

CSX rebuffed merger overtures from Canadian Pacific Railway Ltd. eight months ago, but apparently merger rumors are still circulating.

The railroad company’s stock rose Thursday sparked by, according to Bloomberg News, more speculation about Canadian Pacific.

CSX never commented on the merger talk last October, but Canadian Pacific CEO Hunter Harrison did confirm he talked to CSX and CSX officials weren’t interested in a merger.

Analysts have said regulatory concerns would make a major North American railroad merger unlikely.

CSX’s stock rose as much as $1.51 to $35.48 before closing Thursday at $34.97, up $1 on the day.

 

Analyst upgrades FIS

FIS’s stock also rose Thursday as Robert W. Baird analyst David Koning raised his rating on the stock from “neutral” to “outperform” after meeting with management.

Koning said in a research report he has more confidence that FIS can meet its goals of increasing earnings in the second half of this year.

“While we do not see an immediate catalyst on the horizon, we expect the stock to perform nicely if the company can hit its 2015 guidance plans. If second-quarter results beat expectations, this can prove to be a catalyst, as it would de-risk the rest of the year a bit,” he said.

He also said “if the second half ramp works out as planned, it puts FIS in a nice position for 2016.”

FIS’ stock rose $1.63 to $64.16 Thursday after Koning’s report, in which he increased his price target for the shares from $68 to $70.

 

Kaman building helicopters in Jacksonville

Kaman Corp. said it has resumed production of a heavy-lift utility helicopter, called K-MAX, which will be manufactured at its facility on Jacksonville’s Northside and in Connecticut.

Connecticut-based Kaman said the helicopters can lift up to 6,000 pounds and are used for firefighting, logging and other missions.

The company said the first 10 helicopters produced are expected to generate revenue of $75 million to $85 million. Kaman had total revenue of about $1.8 billion last year.

Kaman’s investor relations department did not respond to an email inquiry about how the helicopter production would impact employment in Jacksonville.

International

Baler sales jump

International Baler Corp. last week reported a big increase in sales for its second quarter ended April 30.

The Jacksonville company, which makes balers used for recycling, said sales rose 31.5 percent to $3.66 million.

With the big increase in sales, International Baler reported net income of $50,761, or 1 cent a share, in the quarter, reversing a loss in the second quarter of fiscal 2014.

“The increase in net sales was the result of higher shipments of horizontal closed door balers and auto-tie balers due to general market conditions,” the company said in a filing with the Securities and Exchange Commission.

 

Gannett spinoff set for June 29

Gannett Co. Inc. last week said the split of its broadcasting and newspaper divisions into separate companies will take effect June 29.

The broadcasting company, named Tegna, will have 46 television stations, including WTLV TV-12 and WJXX TV-25 in Jacksonville.

Tegna will begin trading on the New York Stock Exchange on June 29 under the ticker symbol “TGNA,” while the Gannett newspaper company will trade under the company’s current “GCI” ticker.

The deal is structured so the current Gannett will actually be renamed Tegna, and then a new Gannett will be spun off from Tegna.

Shareholders will receive one share of the new Gannett for every two Tegna shares they own.

 

General Employments increases MPS ties

General Employment Enterprises Inc. is still officially headquartered in Illinois but the staffing company continues to look more and more like a former Jacksonville-based staffing company, MPS Group Inc.

Of course, this started when General Employment acquired Jacksonville-based Scribe Solutions Inc. and installed Scribe CEO Derek Dewan as its chief executive officer. Dewan was a former CEO of MPS and was chairman of MPS when it was acquired by Adecco Group Inc. in 2009.

Last week, General Employment added a second former outside MPS director to its board, former FDIC Chairman William Isaac. This follows the appointment in January of economist Arthur Laffer, who also previously served on the MPS board of directors.

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