Wilbur Ross’ Plan: Build a Better Bank

Distressed asset investor Wilbur Ross, of WL Ross & Co., wants to be a banker. But buying troubled banks like Florida’s BankUnited Financial Corp. just doesn’t really fit his ‘good bank’ plan.

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According to regulatory filings, 60 percent of BankUnited’s $12 billion loan portfolio is in the form of toxic option ARMs; two-thirds of the bank’s deposits are in the form of CDs, as well, leaving only $2.5 billion in the natural deposits investors like Ross see as truly valuable.

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Ross has made billions investing on the cheap in troubled companies that no one else wants. This time, however, rather than wheeling and dealing with industry titans, he appears to be looking to the Obama administration to make new rules that can help turnaround specialists like himself build a good bank from the pieces of broken banks. Given that his American Home Mortgage Servicing, Inc. platform is performing nicely as the nation’s largest independent servicer and just got upgraded two notches by Fitch Ratings, as well, Ross’ investment firm isn’t in bad shape or desperately seeking deposits.