HSBC and Standard Charter shares touched their lowest level in as much as 25 years; other banking shares hit too.
Wells Fargo CEO Charles Scharf has apologised for the comments he made about the difficulty of finding qualified Black executives.
Scharf said on Wednesday “there is a very limited pool of Black talent to recruit from” in corporate America. The memo to employees was written in June, but became public this week.
The comments and similar statements made in a Zoom meeting, reported by Reuters news agency, led to an intense backlash in Washington, DC and on social media.
“Perhaps it is the CEO of Wells Fargo who lacks the talent to recruit Black workers,” said Rep Alexandra Ocasio-Cortez of New York on Twitter.
Scharf said in a prepared statement that his comments reflected “my own unconscious bias”.
“There is no question Wells Fargo has to make meaningful progress to increase diverse representation,” he wrote. Wells has pledged to increase hiring of minority candidates, particularly through Black colleges and universities, as well as new anti-racism training programmes at the bank.
Like much of the political and corporate world, the banking industry has had to face a reckoning for its role in the racial and economic inequality that faces Black and other minorities, in the wake of the death of George Floyd. Banks have announced changes to how they lend, and created new programmes to spur economic development in communities of colour.
Citigroup announced on the same day as Scharf’s apology that it would direct $1bn of the firm’s capital towards closing the “racial wealth gap” in the United States. It would include $550m in homeownership programmes for communities of the dollar, and hundreds of millions towards Black-owned businesses and suppliers.
But, despite those announcements, American banking is dominated by leadership that is largely white and male. None of the six big Wall Street banks has ever had a Black or female CEO. Citigroup a few weeks ago announced it would promote a woman to CEO next year, the first on Wall Street to do so. Banks large and small are still regularly cited for discriminatory practices, including allegations of redlining towards Black homebuyers.
The last prominent African American to serve as CEO at a large financial services company was Kenneth Chenault, the former CEO of American Express. He retired in 2018. In an interview with The Associated Press news agency at the time, Chenault called the lack of a pipeline to recruit and retain diverse talent “embarrassing” to the financial services industry.
Stanley O’Neal, the former CEO Merrill Lynch while it was still an independent company, is also Black. He resigned in 2007 during the firm’s collapse.