Financial Firms Put Backup Plans in Place as Hurricane Sandy Builds Strength

   By Christian Berthelsen, Liz Moyer, Brett Philbin and Matthias Rieker 
 

Financial firms scrambled Monday to shift operations to backup facilities and make accommodations for customers and employees and as they closed offices and braced for Hurricane Sandy, which brought 90-mile-an-hour winds up the East Coast.

Several retail banks closed branches in New York, New Jersey, Connecticut and other states in the storm's path. Most businesses encouraged workers to stay home, while some took precautions so that employees with critical job functions could continue to work.

The moves came as major stock exchanges, which decided late Sunday to close markets on Monday, reached an agreement to remain closed on Tuesday. U.S. bond markets will also be closed Tuesday, after operating until noon on Monday.

The Office of the Comptroller of the Currency, the regulator for federally chartered banks and thrifts, said financial institutions directly affected by the storm were allowed to close though urged them to reopen as quickly as possible.

As part of its "resiliency planning," most J.P. Morgan Chase & Co. (JPM) facilities will be open during the storm except for major office centers in lower Manhattan, and only key personnel would work out of the affected buildings while business activity was being relocated to other sites, according to a memo the New York bank sent to employees on Monday.

J.P. Morgan, the largest U.S. bank by assets and the largest in the New York metropolitan area by branches and deposits, also said 400 of its bank branches in the metro area would close at noon Monday. More than 600 didn't open Monday.

Bank of America (BAC) said late Sunday that its offices at Two and Four World Financial Center in lower Manhattan as well as its city bank branches and Merrill Lynch wealth management offices would be closed on Monday.

All other Bank of America office buildings, including its main New York office at 1 Bryant Park, were expected to remain open.

American Express Co. (AXP), whose headquarters are located in Three World Financial Center, told employees Monday its Tri-State area offices would remain closed for a second straight day on Tuesday, according to a spokesman.

Other banks, including Citigroup Inc. (C), Wells Fargo & Co. (WFC) and Capital One Financial Corp. (COF) also closed most or all branches in New York, New Jersey and other affected areas.

HSBC Bank USA, the U.S. banking subsidiary of HSBC Holdings Plc (HBC), closed most of its retail banking branches in the metro New York area and planned to keep select branches in New Jersey, Connecticut, Long Island and Westchester county, New York, open until noon.

"Where possible, we are encouraging employees in the areas affected by the hurricane to work from home," the bank said.

Many major financial firms closed offices in affected areas or where transportation closures made it difficult to commute, encouraging workers who were able to work from home to do so.

Goldman Sachs Group Inc. (GS) on Sunday said non-critical employees were working from home, though they also had the option of working from offices in Greenwich, Conn., or Princeton, N.J.

Goldman's headquarters building is located in lower Manhattan close to the Hudson River, which is expected to surge more than eight feet. The investment bank also has a significant presence directly across the river from its headquarters building, near the water in Jersey City, N.J.

UBS AG's (UBS) Wealth Management Americas business closed about 50 branches in New York, New Jersey, Connecticut, coastal New England and other affected areas, a spokeswoman said Monday. However, many employees, especially financial advisers, were working from home and staying in touch with their clients, while calls to closed branches were being rerouted to an open branch in another area of the country.

Barclays PLC (BCS, BARC.LN) said its main offices at 745 Seventh Ave. and 200 Park Ave remained open Monday, though it asked staff with non-essential functions to work from home.

Morgan Stanley (MS) said it has about 20,000 employees in the area affected by the storm and about 15,000 employees are currently working logged into their desk computers from external locations.

The investment bank said it had invoked its "Business Continuity Management Plan," which plans disruptions and calls for pre-positioning of staff in accessible locations and transfer of functions to other domestic and international offices.

"As such, we are open for business and ensuring that the needs of our clients are met, while also providing for the safety of affected employees,' the company said in a statement.

Credit Suisse Group AG (CS, CSGN.VX) kept its New York City headquarters at Madison Square Park open for critical staff and said it arranged bus transportation and hotels for those employees. Lazard Ltd.'s (LAZ) New York City office, located high up in Rockefeller Center, also remained open, though employees were allowed to work remotely.

Money manager T. Rowe Price Group (TROW), based in Baltimore, closed its offices early Monday to the bulk of its employees, leaving just a small handful of essential personnel and operations staff on hand, according to spokesman Brian Lewbart.

With 3,821 employees in the region, the closure affected nearly three quarters of T. Rowe's overall staff. The company's headquarters are just steps from Baltimore's Inner Harbor waterfront, and suffered some flooding during 2003's Hurricane Isabel, Mr. Lewbart said.

(Andrew R. Johnson, Mia Lamar and Michael Driscoll contributed to this story.)

-Write to Andrew R. Johnson at [e-mail]

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