Costs at the top US banks jumped more than $ 6.6bn, or 10 per cent, in the most recent quarter compared with the same period of last year as executives paid up for talent and technology to fortify their businesses against increasing competition from nearly every angle.
The increase in spending at JPMorgan Chase, Goldman Sachs, Morgan Stanley, Bank of America, and Citigroup surprised analysts. Many had predicted that banks’ expenses would fall modestly this year as the extra costs associated with doing business during the pandemic faded away.
However, on a series of conference calls this week to discuss quarterly earnings, executives forecast higher annual expenses due to pay increases for bankers and bigger investments in technology and marketing.
“There’s a nervousness among investors that this is the cost of doing business to keep clients from bleeding to fintechs,” said Autonomous Research bank analyst Brian Foran.
Cost increases at most US banks are outpacing revenue growth while banks grapple with historically low interest rates and a dramatic slowdown in lending.
Expenses at the five banks were 21 per cent higher in the second quarter compared with 2019, before the pandemic hit, according to earnings released this week. But second-quarter revenues just rose 10 per cent compared with 2019.
Although technology spending has been on the rise for years, accelerated digitisation during the pandemic has forced executives to stump up even more.
“The urgency and importance when you talk to bank executives seems to go up by the day,” Foran said.
The higher spending represents a shift from how banks reacted to the last financial crisis, when many relied on cost cuts to boost profits. But stimulus programmes helped banks avoid the wave of pandemic-related loan losses that executives had expected, meaning they have extra cash to spend.
“We are identifying, particularly given the pace of the recovery, some real strategic opportunities to invest in the franchise,” Citigroup chief financial officer Mark Mason said this week after the bank reported a 7 per cent increase in costs. “We’re not going to miss this window of opportunity.”
Banks are facing heightened competition in virtually every aspect of their business. Private equity firms now have the capital to execute large deals on their own without relying on banks, and fintech companies are eroding margins in the wealth management business and luring some consumers away from traditional banks with lower fees and perks.
Jamie Dimon, JPMorgan chief executive, warned about the banking industry’s shrinking share of the US financial system in his annual letter to shareholders in April. The bank this week raised its annual expense guidance by 1 per cent to $ 71bn.
“If we can find more good money to spend we’re going to spend it,” Dimon said on the bank’s earnings call.
Compensation, the biggest expense for the industry by far, rose 7 per cent at the five banks in the second quarter compared with last year as they paid up for talent.
Investment banks like Citigroup and JPMorgan have raised salaries for junior investment bankers who complained of burnout during the pandemic, and Bank of America committed to increasing its minimum wage to $ 25 per hour.
Businesses like investment banking with performance-related compensation have also outperformed expectations this year, which is likely to drive up bonuses.
As part of the tech push, banks are increasingly recruiting engineers and data scientists, which increases their median pay, said Jan Bellens, global banking and capital markets sector leader at EY.
Quarterly marketing expenses also soared 46 per cent year-on-year across the group as lenders pushed promotional credit card offers in attempt to jump-start loan growth and bankers got back to wining and dining potential clients after the lockdowns last year.
“The banks are all in the ring and they’re all ready to fight for revenues. Fighting for revenues means spending more on growth,” said Mike Mayo, bank analyst at Wells Fargo.
Other bank-specific factors are also fuelling spending like integration expenses for Morgan Stanley following two large deals and regulatory costs at Citigroup.
Banks will hope this latest round of tech spending will yield better results than previous efforts. Years of prior tech spending have failed to meaningfully reduce the cost of doing business for banks, with banks’ efficiency ratios — a measure of costs as a proportion of income — remaining stubbornly above 50 per cent for years.
Higher spending in the face of revenue pressures could be a tough sell to bank investors who have closely monitored profitability metrics.
“It’s really hard for investors to understand the long-term value of technology investments being made now,” said Vivian Merker, a consultant at Oliver Wyman. “In part because historically there’s been over promises and under delivers and in part because no one knows the future.”
The Central Bank of Azerbaijan (CBA) held a new foreign exchange auction with the participation of the State Oil Fund of Azerbaijan (SOFAZ) on July 15, 2021, Trend reports referring to a source in the CBA.
According to the source, the demand from Azerbaijani banks at the auction decreased by 4.1 percent compared to the previous indicator and was fully met.
During the auction, the CBA sold $ 51.2 million to the local banks.
At the end of the auction, the weighted average rate of the manat to the US dollar amounted to 1.7 AZN/USD.
The first foreign exchange auction for a long time was held with the participation of SOFAZ on March 10, 2020, during which Azerbaijani banks purchased $ 323.2 million.
The CBA began to conduct currency auctions through a one-way sale of currency in a competitive environment from mid-January 2017.
A decision was made in March 2020 to hold extraordinary currency auctions due to the increased demand of the population for foreign currency amid the failure of the OPEC + deal, which led to a sharp drop in oil prices.
Marks and Spencer has 29 banks, all located in stores across the country. All banks are closing for good today with the retailer aiming to focus instead on its credit cards, insurance, savings, and loan products.
“We’re now firmly focused on supporting both our customers and colleagues through this change, and the delivery of our transformation plans, which will create new and rewarding payment solutions for M&S shoppers, both in-store and online,” Mr Spencer added.
The closures will undoubtedly affect both M&S staff and customers.
The retailer has previously said it would redeploy branch workers where possible, but it has not confirmed since how many redundancies will take place.
As for customers, the bank will shut their existing current accounts on August 31.
If there are still funds in place in the bank account by August, they will remain frozen, and customers will need to contact M&S to transfer the money elsewhere.
Following the bank closures, Marks and Spencer’s banking services will now move to online, mobile, and telephone channels only.
M&S Bank’s credit cards, general insurance, savings, and loan products will remain the same.
Therefore, customers who have one or more of these products will be unaffected by the changes.
M&S Bank is not the only bank to shut its doors for good in 2021.
Lloyds Banking Group confirmed last month that it will shut another 44 branches in November, meaning it will have closed a total of 100 banks by the end of the year.
NEW DELHI (Reuters) – India’s government on Sunday denied asking its state-run banks to withdraw funds from their foreign currency accounts abroad on fears that Cairn Energy (OTC:) may attempt to seize the cash in a tax dispute, adding New Delhi was open to resolve the matter.
London-listed Cairn is involved in a long-drawn out tussle with the Indian government over tax claims and was awarded damages of more than $ 1.2 billion by an international tribunal late last year.
New Delhi has filed an appeal against the decision it calls “highly flawed”.
Citing government officials and a banker, Reuters and other media reported on May 6 that the finance ministry had asked state-run banks to withdraw the foreign funds on concern that courts abroad could order that assets in their jurisdiction – including bank accounts – be remitted to Cairn.
The ministry, which gave no comment at the time, called the reports “false” in a statement on Sunday, saying no such instructions had been issued.
“Government of India is vigorously defending its case in this legal dispute … Constructive discussions have been held and the Government remains open for an amicable solution to the dispute,” the statement said.
Separately this month, Cairn also sued India’s flagship carrier Air India to enforce the arbitration award, according to a U.S. District Court filing reviewed by Reuters.
The international tribunal had ruled unanimously that India had breached its obligations to Cairn under the UK-India Bilateral Investment Treaty and awarded Cairn damages of $ 1.2 billion plus interest and costs.
Indian authorities in 2014 had demanded 102 billion rupees ($ 1.4 billion) from Cairn for taxes it said were owed on capital gains related to the 2007 listing of the company’s local unit.
“The Government has raised several arguments that warrant setting aside of the award,” the finance ministry’s statement on Sunday said.
WASHINGTON — The Biden administration’s efforts to provide $ 4 billion in debt relief to minority farmers is encountering stiff resistance from banks, which are complaining that the government initiative to pay off the loans of borrowers who have faced decades of financial discrimination will cut into their profits and hurt investors.
The debt relief was approved as part of the $ 1.9 trillion stimulus package that Congress passed in March and was intended to make amends for the discrimination that Black and other nonwhite farmers have faced from lenders and the United States Department of Agriculture over the years. But no money has yet gone out the door.
Instead, the program has become mired in controversy and lawsuits. In April, white farmers who claim that they are victims of reverse discrimination sued the U.S.D.A. over the initiative.
Now, three of the biggest banking groups — the American Bankers Association, the Independent Community Bankers of America and National Rural Lenders Association — are waging their own fight and complaining about the cost of being repaid early.
Their argument stems from the way banks make money from loans and how they decide where to extend credit. When a bank lends money to a borrower, like a farmer, it considers several factors, including how much interest it will earn over the lifetime of the loan and whether the bank can sell the loan to other investors.
By allowing borrowers to repay their debts early, the lenders are being denied income they have long expected, they argue. The banks want the federal government to pay money beyond the outstanding loan amount so that banks and investors will not miss out on interest income that they were expecting or money that they would have made reselling the loans to other investors.
They also want other investors who bought the loans in the secondary market to get government money that would make up for whatever losses they might incur from the early payoff.
Bank lobbyists, in letters and virtual meetings, have been asking the Agriculture Department to make changes to the repayment program, a U.S.D.A. official said. They are pressing the U.S.D.A. to simply make the loan payments, rather than wipe out the debt all at once. And they are warning of other repercussions, including long-term damage to the U.S.D.A.’s minority lending program.
In a letter sent last month to Tom Vilsack, the agriculture secretary, the banks suggested that they might be more reluctant to extend credit if the loans were quickly repaid, leaving minority farmers worse off in the long run. The intimation was viewed as a threat by some organizations that represent Black farmers.
“If U.S.D.A. does not compensate lenders for such disruptions or avoid sudden loan payoffs, the likely result will be less access to credit for those seeking U.S.D.A. guaranteed loans in the future, including U.S.D.A. farmers/ranchers,” they wrote to Mr. Vilsack in April.
The U.S.D.A. has shown no inclination to reverse course. An agency official said that obliging the banks would put an undue burden on taxpayers and that the law did not allow the agency to pay interest costs or reimburse secondary market investors. The agency hopes to be able to begin the debt relief process in the coming weeks, according to the official, who requested anonymity because they were not authorized to comment on the program.
The relief legislation that Congress passed in March provided “sums as may be necessary” from the Treasury Department to help minority farmers and ranchers pay off loans granted or guaranteed by the Agriculture Department. Most of the loans are made directly to farmers, but about 12 percent, or 3,078, are made through lenders and guaranteed by the U.S.D.A.
While America’s banks have flourished in the last century, the number of Black-owned farms has declined sharply since 1920, to less than 40,000 today from about a million. Their demise is the result of industry consolidation as well as onerous loan terms and high foreclosure rates.
Black farmers have been frustrated by the delays and say they are angry that banks are demanding additional money, slowing down the debt relief process.
“Look at the two groups: You have the Black men and women who have gone through racism and discrimination and have lost their land and their livelihood,” said Bill Bridgeforth, a farmer in Alabama who is on the board of the National Black Growers Council. “And then you have the American Bankers Association, which represents the wealthiest folks in the land, and they’re whining about the money they could potentially lose.”
John Boyd Jr., president of the National Black Farmers Association, a nonprofit, said he found it upsetting that the banks said little about years of discriminatory lending practices and instead complained about losing profits.
“They’ve never signed on to a letter or supported us to end discrimination, but they were quick to send a letter to the secretary telling him how troublesome it’s going to be for the banks,” Mr. Boyd said. “They need to think about the trouble they’ve caused not working with Black farmers and the foreclosure process and how troublesome that was for us.”
Mr. Boyd urged Mr. Vilsack not to let the debt relief stall.
“It’s planting season and Black farmers and farmers of color really could use this relief,” Mr. Boyd said.
Cornelius Blanding, executive director of the Federation of Southern Cooperatives/Land Assistance Fund, said that the letter from the banks appeared to be a veiled threat.
“They are prioritizing profits over people,” Mr. Blanding said, expressing concern that the backlash from banks and white farmers could delay the debt relief. “Debt has been a burden on the back of many farmers and especially farmers of color. Them holding this up really prolongs justice.”
Although the government is paying 120 percent of the outstanding loan amounts to cover additional taxes and fees, banks say that unless they get more, they will be on the losing end of the bailout.
The banking industry groups could not offer an estimate of how much additional money they would need to be satisfied. The Agriculture Department said it would cost tens of millions of dollars to meet the banks’ demands.
In the letter to Mr. Vilsack, the bank lobbyists pointed to one large community bank, which they said had a $ 200 million portfolio of loans to socially disadvantaged farmers that would lose millions of dollars of net income per year if the loans were quickly paid off. They warned that such a move would “undoubtedly reduce the bank’s ability to retain employees.”
The American Bankers Association defended the request, arguing that lenders have been a lifeline to minority farmers. It said that the matter primarily affects the group’s smaller members that have large portfolios of loans from socially disadvantaged borrowers. Representatives for Goldman Sachs, JPMorgan Chase and Citigroup said that the debt relief program had not been on their radar and that they had not been lobbying against it.
“We recognize the need for U.S.D.A. to carry out this act of Congress, and we support the goal of providing financial relief to socially disadvantaged farmers and ranchers,” said Sarah Grano, a spokeswoman for the American Bankers Association. “We believe it would be helpful if the U.S.D.A. implemented this one-time action without causing undue financial harm to the very lenders who have been supporting farmers with much-needed credit.”
Danny Creel, the executive director of the National Rural Lenders Association, said he had no comment. An official from the Independent Community Bankers of America said that the group was not currently considering litigation and that it anticipated that the federal government would find a way to accommodate its requests.
Lawmakers who helped craft the relief legislation have expressed little sympathy for the banks and are pressing the agriculture department to get the money out the door.
Senator Cory Booker, a New Jersey Democrat, said: “U.S.D.A. should now take this first step toward addressing the agency’s history of discrimination by quickly implementing the law that Congress passed and moving forward without delay to pay off in full all direct and guaranteed loans of Black farmers and other socially disadvantaged farmers.”
The banks are not the only ones who have been fighting the debt relief initiative. A group of white farmers in Wisconsin, Minnesota, South Dakota and Ohio are suing the Agriculture Department, arguing that offering debt relief on the basis of skin color is discriminatory. America First Legal, a group led by the former Trump administration official Stephen Miller, filed a lawsuit making a similar argument in U.S. District Court for the Northern District of Texas this month.
Mr. Vilsack said at a White House press briefing this month that his department would not be deterred by pushback against its plans to help minority farmers.
“I think I have to take you back 20, 30 years, when we know for a fact that socially disadvantaged producers were discriminated against by the United States Department of Agriculture,” Mr. Vilsack said. “So, the American Rescue Plan’s effort is to begin addressing the cumulative effect of that discrimination in terms of socially disadvantaged producers.”
The move marks Bitcoin’s second such “comeback” in a week. While the bearish trend reset, analysts were keen to see how much fuel Bitcoin had accumulated after dipping to near $ 53,000 overnight.
For Philip Swift, co-founder of trading suite Decentrader, fundamental indicators still pointed to a continuation of the longer-term bull market.
“I continue to think that Bitcoin will not crash and is more likely to range before breaking out to the upside,” part of a series of tweets read on the day.
“Many other indicators suggest $ BTC has much more upside and the cycle is not over.”
Swift specifically noted that one tool, the Pi Cycle Top indicator, had “nailed” Bitcoin’s most recent all-time high of $ 64,500 in April. As Cointelegraph reported, Pi has become increasingly popular for those tracking BTC price trends over successive years.
At the time of writing, BTC/USD circled $ 57,200, ruminating after reaching local highs of $ 57,400.
No plain sailing for altcoin bagholders
Hodlers thus received a welcome response from the largest cryptocurrency, which had spent much of the week being humiliated at the hands of a surging altcoin market.
Among the astonishing movers were tokens such as Dogecoin (DOGE) and Ethereum Classic (ETC), the latter having laid dormant for much of the past three years since the end of the previous broad “alt season.”
Words of caution, veiled or not, were nonetheless not in short supply, as Bitcoin proponents warned about the fickle nature of such parabolic altcoin moves.
Bitcoin dragging all markets down as people flee to superior assets such as Dogecoin.
Acting in Bitcoin’s favor meanwhile was news that it would be supported by “hundreds” of banks in the United States in 2021, along with investment giant Grayscale becoming a sponsor of NFL team the New York Giants.
“What we’re doing is making it simple for everyday Americans and corporations to be able to buy bitcoin through their existing bank relationship,” said Patrick Sells, head of bank solutions at crypto custody firm NYDIG, which is behind the scheme, revealing the scale of the rollout to CNBC.
Keiser Report hosts Max and Stacy look at how companies are starting to protect their balance sheets from the melting ice cube of excessive money printing.
As central banks continue to print, “asset holders are becoming fabulously rich, so the split between rich and poor is growing spectacularly,” says Max.
According to him, it’s abundantly obvious now that this money printing causes poverty, increases wealth and income gaps as well as unemployment, and the social misery that comes with it. “So, here’s Joe Biden, Clinton, neo-liberalism, ravaging trillions from the middle class, creating huge number of the newly poor,” Max says.
Max Keiser interviews Craig Hemke of TFMetalsReport.com about the prices of gold and silver being unable to signal anything, thanks to interventions in price discovery.
They agree that the silver mining industry is “in the pockets” of the regulators and the Federal Reserve, “and they do what they want them to do.”
The bullion banks hold the mining companies hostage because miners need cash flow for production, says Hemke. He explains that the miners sell their product to the banks which give them cash, and then the banks take the product and keep it for themselves. The firms “routinely withhold production because they know the price has been ridiculously manipulated lower.”
The expert suggests that if people want to diversify out of dollars, they could buy some physical metal. “That makes sense… And if we could all kind of make a practice of doing it, kind of roughly at the same time… then we could really make an impact on how this system is structured,” he says.
ISTANBUL (Reuters) – Some of Turkey’s biggest banks are reluctant to finance President Tayyip Erdogan’s planned Istanbul canal due to environmental concerns and the investment risks hanging over the massive construction project, four senior bankers told Reuters.
Two of the sources said a global sustainability pact that six of Turkey’s top banks have signed was a barrier to funding the Kanal Istanbul, which Erdogan dubbed his “crazy project” when he floated it a decade ago.
The government expects to break ground in June on the canal, which would connect the Black Sea to the north with the Marmara Sea to the south, running 45 km (28 miles) through marshland, farms and towns on the western edge of the city.
Erdogan says the canal would protect the Bosphorus Strait, which runs through the heart of Istanbul, by diverting traffic.
Yet Istanbul’s mayor, engineers and, according to one poll, most citizens, oppose the project on enviromental grounds, saying it would destroy a marine ecosystem and resources that supply almost a third of the city’s fresh water. https://reut.rs/3nnWmQN
Russia, meanwhile, has signalled unease about the project on security grounds as the canal would open a second passage to the Black Sea, which is home to a Russian naval fleet.
“I don’t think we can take part in the funding of Kanal Istanbul,” said a senior banker who requested anonymity. “It may trigger some environmental issues.”
Six Turkish banks, including Garanti Bank, Is Bank and Yapi Kredi, have signed the U.N.-backed Principles for Responsible Banking framework which calls on signatories to avoid harming people and the planet.
“Definitely we don’t want to give a loan to this kind of project because of the environmental issues,” a second senior banker told Reuters, adding that signatory banks must abide by the U.N.-backed sustainability pact.
In 2019, the canal’s price tag was estimated at 75 million lira – or $ 13 billion at the time – in a government report.
The reluctance of some Turkish lenders to finance the project makes it more likely state and foreign financing will have to play a bigger role for Erdogan’s dream to come true.
A Finance Ministry spokesman did not immediately respond to a request for comment.
Asked whether Turkish banks would participate in the financing, Erdogan’s spokesman and adviser, Ibrahim Kalin, told Reuters the project would “certainly” attract investors and creditors when tenders are held soon.
Garanti Bank declined to comment. Is Bank and Yapi Kredi did not immediately respond to requests for comment.
Denizbank and state-owned Vakifbank also declined to comment on the canal’s financing while Akbank and state lenders Halkbank and Ziraat Bank did not immediately respond to requests for comment.
The cost of the canal would eclipse other mega projects such as Istanbul’s vast new airport that have defined Erdogan’s legacy of credit-driven growth.
Massive foreign short-term debt worth some $ 150 billion for banks and companies has dogged the lira and laid bare the risks of Turkey’s depleted foreign exchange reserves.
A currency crisis in 2018 delayed the canal project but it is back on the agenda as the economy rebounds from the pandemic and the government approved development plans last month.
In an interview on Sunday, Erdogan’s adviser Kalin said there was already interest in the bidding that would be open to all including Turkish, European, American and Chinese firms.
“It’s a profitable project … and we are positive it will move forward,” he told Reuters.
But for most of Turkey’s banks, especially lenders with European backers and those involved in loan syndications, the risks would likely be too high, the sources said.
They said taking on such a large project could limit their capacity to carry out further loan syndications while there was also a risk the project could be torpedoed at a later stage.
“No Turkish bank, neither state nor private, could take that risk,” said a former senior banker.
Turkey’s environment ministry has carried out environmental assessments which cleared the way for the project to proceed.
But European backers of Turkish banks would probably not see a Turkish environmental stamp of approval as credible, the former banker said.
“This is one of those white elephants. Other than land price speculation, it is hard to see any value in it,” he said.
The canal would destroy a marine ecosystem and basins that provide nearly a third of Istanbul’s fresh water, according to the Union of Chambers of Turkish Engineers and Architects.
Moscow is concerned the canal might not be covered by the Montreux Convention that restricts foreign warships’ access to the Black Sea through the Bosphorus Strait.
A Turkish official said in 2019 that the new canal would not be covered by the convention, which dates back to 1936.
This month, amid a build-up of Russia’s navy near Ukraine, the Kremlin said President Vladimir Putin told Erdogan on a call that the convention must be observed.
A fourth banker also said that given opposition parties oppose the project, construction could halt if Erdogan’s ruling AK Party is ousted. Presidential elections are set for 2023.
“The size of the project is tremendously big. It has reputational risks and loan risk,” the person said. “It also still seems like government’s pet project.”
When M. Katherine Banks became the new engineering school dean at Texas A&M University in 2012, an associate dean drove her to the Zachry building, the heart of the university’s engineering program in College Station.
He pulled into the basement-level garage and honked the horn twice — a preventive measure to scare off skunks that infested the aging facility.
Above them, the building reeked of mold. Engineering students not-so-lovingly dubbed it the “Zachry Smell.” Inside the building’s lecture hall, a once-impressive revolving stage, was broken.
Ten years later, the skunks are gone. Banks raised $ 76 million in private donations that helped build a state-of-the-art engineering building that boasts multiple high-tech labs and collaborative meeting spaces.
She commissioned 10 original art pieces, all inspired by science, technology and engineering, for the half a million square foot building that now enrolls more than 21,000 students — nearly twice the number of students from when she started. Many leaders within Texas A&M point to the center as a physical testament to her success running the college, which now enrolls nearly a third of all of Texas A&M’s student body.
“The house that Banks built,” an assistant vice chancellor joked last week during a tour of the facility, causing Banks to cringe.
“I don’t know where that [phrase] came from,” she said modestly.
Banks is not typically one to seek out attention, but starting June 1 she’ll enter the spotlight as the 26th president of Texas’ biggest university, the second woman to ever run the flagship campus.
She takes over as Texas A&M faces multiple challenges, including how to navigate a return to “normal” campus operations after the COVID-19 pandemic upended learning and campus life. She’ll also take the reins of a diversity and inclusion plan meant to increase students and faculty of color after a year where conversations about racial injustice and inequality on campus took center stage.
The Board of Regents last week approved her as the next president of Texas A&M, with a $ 925,000 annual salary over the next five years. Banks ended up negotiating her salary down $ 350,000 less than she was initially offered due to the current economic situation brought by the pandemic.
“If she can do for the rest of the university what she did for engineering, it’s gonna be a hell of a show to watch” said System Chancellor John Sharp, who said he had tried to convince Banks to apply for president six years ago, but she wasn’t ready to leave the engineering school. “She’s a visionary and an executor…[but] at the core of it all, it’s giving opportunities to the students that are here. I think that’s what makes her tick.”
While Texas A&M leaders said Banks has the track record of a proven leader, in an interview with The Texas Tribune, Banks tread so cautiously she was reluctant to even outline her vision for the broader university or discuss goals she has as president.
She declined to weigh in on heated issues that she will certainly have to address in the coming year, like the debate over the Lawrence Sullivan Ross statue. She even stopped short of definitively choosing her favorite piece of art in the Zachry building during a tour.
“I believe it would be presumptive to outline a vision without first meeting with and listening to the many constituents and stakeholders about their challenges, opportunities and ideas,” Banks wrote in response to follow up questions.
Banks said she plans to embark on a listening tour across campus before making concrete plans or setting goals. She admits she has a learning curve ahead when it comes to running other aspects of campus, including student affairs and athletics.
A more ‘normal’ fall
But Banks is clear that she wants the fall semester at Texas A&M to be something of a return to pre-pandemic life.
“We’re hopeful we will have a full [football] stadium … we don’t have to walk around with masks, we’re hopeful we don’t have social distancing,” Banks said “If we have an emergency situation, we will adjust to that. But right now, and perhaps this is the Aggie optimism, we are planning for a fully operational campus in normal mode.”
Banks said students learn best in the classroom interacting with faculty and other students.
“Without that, they may not…retain the information that we need them to be graduates of this institution,” she said.
But she cautioned it won’t be simply returning to college life as it was in 2019. She anticipates much of the fall will include rebuilding communities — social circles, faculty meetings, student organizations — that waned because they were difficult to maintain remotely.
Banks’ push for a totally in-person fall semester has the support of many students, but faculty are more cautious.
John Stallone, chair of the faculty senate, said while faculty understand the push to return to in-person classes, there is a concern that teaching in person will become a mandate.
“If we have another surge over the summer in COVID, then that’s going to raise some concerns and some worries amongst faculty,” Stallone said. “I hope that the flexibility that we’ve had so far will remain as she takes over.”
Banks said she anticipates the future of higher education will include some kind of hybrid learning, with both remote and in-person instruction. Stallone cautions that often means extra work for faculty.
“You can’t just use your in-person lecture online,” he said. “It’s not just a direct transfer, or an easy transfer in that regard. So you have to do things a little bit differently in order for it to work well, simultaneously.”
Eric Mendoza, a junior who is student body president at Texas A&M, said he thinks a normal fall is also contingent on students getting vaccinated and he’s interested in seeing how the new leadership handles that ahead of the fall semester.
“I think the trickiest part … is trying to convince our student body to want to get vaccinated,” Mendoza said, not because all students are hesitant to get the vaccine, but because they may be less concerned with getting seriously ill or not prioritizing finding an appointment.
Banks said she encourages everyone who can to get the vaccine, but declined to share an opinion of whether she believes vaccines should be required.
Recently, St. Edward’s University, a small, private university in Austin, announced vaccines will be required for the fall semester. Elsewhere, Cornell University and Rutgers University are also among the few universities nationwide mandating the shots. This week, Gov. Greg Abbott said any publicly funded entity cannot require a vaccine for services, which would effectively prevent Texas A&M from mandating the vaccines.
Increasing Black student enrollment
Last summer, intense protests broke out on campus over the statue of Sul Ross, a former Texas A&M president and Confederate general.
Banks would not share her personal opinions on the issue, saying Sharp’s decision to keep the statue was final and she supported the initiatives established to improve diversity among students and faculty. A task force was set up to provide recommendations to the university’s Academic Plaza, where the Ross statue is located, and tell “the full story of the university’s history.”
Asked about the university’s plans for diversity outreach, Banks said Texas A&M has done a good job of recruiting Hispanic students, but recognized the Black student population remained low. It currently hovers around 3%, though Black people are 12% of Texas’ overall population.
She stressed the university has a plan to address these disparities, pointing to the initiatives approved by the Board of Regents earlier this year which includes nearly $ 25 million dollars for additional scholarships to recruit more students of color and increased efforts to hire more faculty of color.
While Banks has increased student enrollment within the engineering school, it has not grown equally across all demographics. Black students still make up around 2.5% of all engineering students in fall 2020, compared to 2.7% in 2011 before she took over. She has overseen growth in Asian and Hispanic students which make up 13% and 22% of the college’s population today.
Banks said recruiting Black students in engineering is a national challenge and educators need to start introducing students to a possible future in engineering early. She pointed to multiple programs she has launched to introduce K-12 students to engineering, curriculum help for science and math K-12 teachers, and additional programs for current Texas A&M students, including a summer bridge program to help underprepared students get up to speed.
Leaving home for college
Banks came to Texas A&M from Purdue University, where she headed the civil engineering school, and was a professor at Kansas State University before that.
She describes herself as a persistent leader who isn’t afraid to fail.
“I tell the students that often certainly you have to have a basic skill set, you have to work hard, but you have to be persistent,” she said. “So if you fail, then stand back up, dust yourself off and start again, figure out why you haven’t done well and adjust. So I tend to have that characteristic. … And if I want to do something, I’ll do it.”
Indeed, many of the biggest wins and highest profile initiatives over the past few years at Texas A&M have Banks’ fingerprints on them.
She also oversaw the partnership with the Army Futures Command which has made the university’s RELLIS campus its hub for military research and new technology testing as it modernizes the Army, including cutting-edge research in hypersonics and autonomous vehicles.
As dean, Banks set a goal of enrolling 25,000 engineering students by 2025, ignoring skeptics who argued such an aggressive expansion would water down the program’s quality. The school is currently on track to meet that target and the program’s prestige is on the rise.
Just last week, U.S. News and World Report ranked the graduate engineering school 11th in the country and the best in the state for the first time, squeaking by the University of Texas at Austin.
She often refers back to her humble upbringing in Whitesburg, Kentucky as the place where she developed her values which have an emphasis on community and family. It’s also where she learned first hand how insurmountable it can be for young people to pick up and leave for a college education.
“We really didn’t talk about [college],” Banks remembered. ”It certainly wasn’t discussed in high school. … We didn’t really talk about moving away, we did not talk about, ‘What do you want to do when you grow up?’”
When she did pack up for Gainesville, Florida, where she earned her bachelor’s degree from the University of Florida, her grandfather — whom she deeply respected and had a close relationship — was angry that she would leave.
Banks’ father graduated college, but she said the experience of disappointing her grandfather gave her perspective on how many first generation college students struggle with the prospect of leaving home.
It’s one reason why she set up engineering academies across the state where students are accepted to Texas A&M, but take their first two years at one of six partner community colleges. The students are taught by engineering professors at Texas A&M who Banks sends to the local colleges.
“Leaving an area that could be impoverished or a family [where a] student is a first-generation college student is quite daunting to think of, leaving their hometown, their surrounding area, their supportive community,” Banks said. “But if they have one or two years of community college, they develop a cohort [of students] and that cohort comes here together.”
Data shows students in the academies achieve slightly higher grade point averages than engineering students who start at the College Station campus.
Disclosure: Texas A&M University, St. Edward’s University, University of Texas at Austin and University of Texas System have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune’s journalism. Find a complete list of them here.