In response to a Florida press report, Raymond James Financial Chairman and CEO Thomas A. James says the firm is continuing with its plans to convert Raymond James Bank from a thrift to a commercial bank. The decision to seek the status of a financial holding company, though, was not taken as part of the recent Wall Street upheaval, the firm says. Instead, it has been part of long-term planning discussions for several years.
The board of Raymond James has been concerned about the limitations associated with Raymond James Bank’s thrift status, leading to alternative charter considerations, the company says. The move would permit a higher proportion of corporate lending, which has historically been more profitable and bears less interest rate risk.
“It’s an unfortunate misperception that Goldman Sachs, Morgan Stanley and now Raymond James are fundamentally changing their business models,” explained James. “In fact, these changes are more form than substance in that regard.”
James says that the company he heads takes a “conservative approach to the use of leverage,” unlike some of the Wall Street firms that have been hurt by their auction-rate securities and related products.
Raymond James Financial has more than 4,900 financial advisors and client assets of $211 billion, of which about $36 billion are managed by the firm’s asset management subsidiaries.