Wells Fargo & Co. is a diversified
financial services company with
operations around the world. Wells Fargo is the fourth largest bank
in the US by assets and the third largest bank by market cap. Wells
Fargo is the second largest bank in deposits, home mortgage
servicing, and debit card. In 2007 it was the only bank in the
United States to be rated AAA by
S&P , though its rating has since
been lowered to AA- in light of the 2008 Financial Crisis.
Headquartered in San Francisco,
California
(its bank, Wells Fargo Bank, N.A., is legally
chartered in Sioux
Falls
, South
Dakota
), Wells Fargo is a result of an acquisition of
California-based Wells Fargo & Co. by Minneapolis
-based Norwest
Corporation in 1998. The new company chose to
keep the name Wells Fargo, to capitalize on the 150-year history of
the nationally-recognized Wells Fargo name and its trademark
stagecoach. After the merger, the company maintained its
headquarters in San Francisco and charter in Sioux Falls.
As of 2009, Wells Fargo has 6,650 retail branches (called stores by
Wells Fargo), 12,260
automated
teller machines, 276,000 employees and over 48 million
customers. Wells Fargo currently operates stores and ATMs under the
Wells Fargo and
Wachovia names. Wells Fargo
was named as "The World's Safest US Bank" based on long-term
foreign currency ratings from
Fitch
Ratings and
Standard &
Poor's and the long-term bank deposit ratings from Moody’s
Investors Service for the year 2007.
Wells Fargo is one of the
Big Four
Banks of the United States with
Bank of America,
Citigroup and
JP Morgan
Chase.
Lines of business
Wells Fargo offers a range of financial services in over 80
different business lines. Wells Fargo delineates three different
business segments when reporting results:
Retail Banking,
Wholesale Banking, and
Consumer Finance.
Community banking
The Community Banking segment includes Regional Banking, Wealth
Management Group, Diversified Products and the Consumer Deposits
groups.
Wells Fargo also has around 9,400 stand alone mortgage branches
throughout the country. It also does mortgage wholesale lending
through independent
mortgage
brokers.
Brokerage
Wells Fargo offers investment products through its subsidiaries,
Wells Fargo Investments, LLC and
Wells Fargo Advisors (previously known
as Wachovia Securities). It also offers mutual funds under the
Wells Fargo Advantage brand name and
Evergreen Funds.
Calibre
Calibre is a subsidiary that Wells Fargo currently
uses for its wealth management services to ultra-high net worth
families with net worth exceeding $25 million. Calibre was acquired
as part of the purchase of Wachovia.
Internet services
Wells Fargo launched its
personal
computer banking service in 1989 and was the first bank to
introduce access to
banking accounts
on the
web in May 1995.
Wells Fargo's Business
Online
Banking gives small business owners all the services available
to consumers, plus services designed specifically for
businesses.
The new Wells Fargo vSafe service offers online storage of
documents.
Wholesale
The Wholesale Banking segment contains products sold to large and
middle market commercial companies, as well as to consumers on a
wholesale basis. This includes lending,
treasury management,
mutual funds, asset-based lending, commercial
real estate,corporate and institutional
trust services, and
investment
banking through
Wells Fargo
Securities. The company also owns Barington Associates, a
middle market investment bank. Wells Fargo historically has avoided
large corporate loans as stand-alone products, instead requiring
that borrowers purchase other products along with loans—which the
bank sees as a
loss leader. One area
that is very profitable to Wells, however, is
asset-based lending: lending to large
companies using assets as collateral that are not normally used in
other loans. This can be compared to
subprime lending, but on a corporate level. The
main brand name for this activity is "Wells Fargo Foothill," and is
regularly marketed in
tombstone ad in the
Wall Street Journal.
Wells Fargo also owns Eastdil Secured, which is described as a
"real estate investment bank" but is essentially one of the largest
commercial real estate brokers for very large transactions (such as
the purchase and sale of large Class-A office buildings in central
business districts throughout the United States).
Consumer finance
Wells Fargo Financial is the
consumer
finance segment. It engages in
lending
through over 1,000 branches throughout the U.S. and in certain
other countries. This division also engages in "indirect lending"
for such organizations as furniture retailers.
This business is based
out of Des Moines,
Iowa
. Norwest purchased DIAL Finance before its
acquisition with Wells Fargo.
The Home Mortgage group is based out of
West Des Moines,
Iowa
.
Business model

A map of states where Wells Fargo
operates retail banks under the Wells Fargo and Wachovia
names
The present business model of Wells Fargo is summed up in its
vision statement: "We want to satisfy all of our customers'
financial needs, help them succeed financially, be the premier
provider of financial services in every one of our markets, and be
known as one of America's great companies."
Wells Fargo's goal is to encourage its customers to buy all their
financial products through Wells Fargo: "We want to earn 100
percent of our customers' business. The more products customers
have with Wells Fargo the better deal they get, the more loyal they
are, and the longer they stay with the company, improving
retention. Eighty percent of our revenue growth comes from selling
more products to existing customers. Our goal: sell at least eight
products to every customer."
This is a concept known as "
cross-selling," or as Wells Fargo refers to
it, "needs-based selling," which is popular in the
financial services industry. While
earlier companies, such as
Prudential,
pioneered the concept of selling a variety of products, they acted
merely as
holding companies and each
product was sold through its own
distribution channel. However,
predecessor Norwest pioneered selling all its products through all
its channels, with discounts given to those who purchase a larger
variety.
The average "cross-sell ratio" for a
financial institution is two (based on
an average American consumer owning sixteen different financial
products from eight different institutions). Wells Fargo purports
to have a cross-sell ratio of 5.5 (2007 data) products per
Community Banking household (almost one in five have more than
eight), 6.1 (2007 data) for Wholesale Banking customers, and the
average middle-market commercial banking customer has more than
seven products, which is among the highest in the country.
(
Washington Mutual was beating
them at the end of 2003 with a 5.59 ratio.)
Global Presence
Wells Fargo has a presence in India as well.
Wells Fargo India Solutions
(WFIS) is a wholly owned subsidiary of Wells Fargo. WFIS is an
extended arm of the organization created to support the needs for
expansion in technology and business processes. Set up in September
2006 in Hyderabad, India, it is already operating out of two
facilities in the city and has people strength of over 850. Its two
Offices are located at Raheja MindSpace, Hitech City, and Maytas
Hill County SEZ, Bachupally respectively.
History
The
current Wells Fargo is a result of a 1998 merger between Minneapolis
-based Norwest Corporation
and the original Wells
Fargo. Although Norwest was the nominal survivor, the
new company kept the Wells Fargo name to capitalize on the long
history of the nationally-recognized Wells Fargo name and its
trademark
stagecoach (the company's
slogan, "The Next Stage," is a nod to the company's wagons-west
motif). After the acquisition, the parent company moved its
headquarters to San Francisco.
Wachovia acquisition superseding plans by Citigroup
On October 3, 2008,
Wachovia agreed to be
bought by Wells Fargo for about $14.8B in an all stock transaction.
This news came four days after the
FDIC made
moves to have
Citigroup buy Wachovia for
$2.1B. Citigroup protested Wachovia's agreement to sell itself to
Wells Fargo and threatened legal action over the matter. However,
the deal with Wells Fargo is expected to overwhelmingly win
shareholder approval as it values Wachovia at about 7 times what
the Citigroup deal valued Wachovia. To further ensure shareholder
approval, Wachovia issued Wells Fargo with preferred stock that
holds 39.9% of the voting power in the company. On October 4, 2008,
a New York state judge issued a temporary injunction blocking the
transaction from going forward while the situation was sorted out.
Citigroup alleges that they had an exclusivity agreement with
Wachovia that barred Wachovia from negotiating with other potential
buyers. The injunction was overturned late in the evening on
October 5, 2008, by New York state appeals court.
Citigroup and Wells Fargo had entered into negotiations brokered by
the FDIC to reach an amicable solution to the impasse. Those
negotiations failed, however. Sources say that Citigroup was
unwilling to take on more risk than the $42B that would have been
the cap under the previous FDIC-backed deal (with the FDIC
incurring all losses over $42B). While Citigroup was no longer
attempting to block the merger, they indicated they will seek
damages of $60B for breach of an alleged exclusivity agreement with
Wachovia.
Corporate predecessors
The holding company was previously known as
Norwest
Corporation and before that as
Northwestern
National Bank (BANCO). Norwest was "one of the most
acquisitive banks of the 1990s...." Most of the management and the
business model of the present day Wells Fargo come from Norwest
Bank, and the stock history of Wells Fargo is that of
Norwest.
Selected predecessor companies
2008 Financial Crisis
On October 28, 2008, Wells Fargo and Company was the recipient of
$25B of the Emergency Economic Stabilization Act Federal bail-out
in the form of a preferred stock purchase.
[641349] Recent tests by the Federal government
revealed that Wells Fargo needs an additional 13.7 billion dollars
in order to remain well captialized if the economy were to
deteriorate further under stress test scenarios. On May 11, 2009
Wells Fargo announced an additional stock offering which was
completed on May 13, 2009 raising $8.6 billion in capital. The
remaining $4.9 billion in capital is planned to be raised through
earnings.
Key dates
- 1852: Henry Wells and William G. Fargo,
the two founders of American
Express, form Wells Fargo & Company to provide express and
banking services to California.
- 1860: Wells Fargo gains control of Butterfield Overland Mail Company,
leading to operation of the western portion of the Pony Express.
- 1866: 'Grand consolidation' unites Wells Fargo, Holladay, and
Overland Mail stage lines under the Wells Fargo name.
- 1904: A.P. Giannini creates the Bank of Italy in San
Francisco.
- 1905: Wells Fargo separates its banking and express operations;
Wells Fargo's bank is merged with the Nevada National Bank to form
the Wells Fargo Nevada National Bank.
- 1918: As a wartime measure, the U.S. government nationalizes
Wells Fargo's express franchise into a government agency known as the American
Railway Express Agency. The
government takes control of the express company. The bank begins
rebuilding but with a focus on commercial markets.
- 1923: Wells Fargo Nevada merges with the Union Trust Company to form the Wells Fargo Bank
& Union Trust Company.
- 1928: Giannini forms Transamerica Corporation as a
holding company for his banking and other interests.
- 1929: Northwest Bancorporation, or Banco, is formed as a
banking association.
- 1954: Wells shortens its name to Wells Fargo Bank.
- 1957: Transamerica spins off its banking operations, including
23 banks in 11 western states, as Firstamerica Corporation.
- 1960: Wells Fargo merges with American Trust Company to form
the Wells Fargo Bank American Trust Company.
- 1961: Firstamerica changes its name to Western
Bancorporation.
- 1962: Wells again shortens its name to Wells Fargo Bank.
- 1968: Wells converts to a federal banking charter, becoming
Wells Fargo Bank, N.A.
- 1969: Wells Fargo & Company holding company is formed, with
Wells Fargo Bank as its main subsidiary.
- 1981: Western Bancorporation changes its name to First
Interstate Bancorp.
- 1982: Banco acquires consumer finance firm Dial Finance which is renamed Norwest Financial
Service the following year.
- 1983: Banco is renamed Norwest Corporation.
- 1983:
Largest U.S. bank heist to date takes place at a Wells Fargo depot
in West Hartford,
Connecticut
.
- 1986: Wells Fargo acquires Crocker National Corporation from
Midland Bank.
- 1987: Wells Fargo acquires the personal trust business of
Bank of America.
- 1988: Wells Fargo acquires Barclays Bank of California from
Barclays plc.
- 1995: Wells Fargo becomes the first major financial services
firm to offer Internet banking.
- 1996: Wells Fargo acquires First Interstate for $17.3
billion.
- 1998: Wells Fargo Bank merges with Norwest Corp. of
Minneapolis. Norwest changes its name to Wells Fargo and moves to
San Francisco.
- 2000: Wells Fargo acquires First Security Corporation.
- 2001: Wells Fargo acquires H.D. Vest Financial Services.
- 2007: Wells Fargo acquires CIT
Construction.
- 2007: Wells Fargo acquires Placer
Sierra Bank.
- 2007: Wells Fargo acquires Greater Bay Bancorp.
- 2008: Wells Fargo acquires Century
Bank.
- 2008: Wells Fargo acquires Wachovia
Corporation.
- 2009: Wells Fargo acquires North Coast Surety
Insurance Services
Historical Data
Image:Wellsfargo_al.jpg|Asset &
LiabilityImage:Wellsfargo_al_ratio.jpg|Asset/Liability
RatioImage:Wellsfargo_income.jpg|Net Income
Wells Fargo Bank was the fifth largest bank at the end of 2008 as
an individual bank. (Not including subsidiaries)
Environmental record
Wells Fargo has received awards for environment in Green Power
Leadership Club, Partner of the Year 2007 and is in the top 25 of
Green Power Partnership. In line with its commitment to the
environment, Wells Fargo purchases renewable energy certificates
(RECs) to support the generation of 550 million kilowatt-hours of
clean, renewable wind energy per year. “This commitment reflects
the desire of our team members to do what’s right for our
customers, our communities, and our company. By purchasing RECs we
are advancing our efforts to reduce our greenhouse gas emissions
while doing our part to encourage the development of new renewable
energy sources,” said Mary Wenzel, Vice President of Environmental
Affairs. Through its green power purchase, Wells Fargo is helping
to address important business and societal issues such as rising
energy costs, poor air quality and climate change and taking steps
toward achieving its goal of integrating environmental
responsibility throughout the Company’s business practices and
operations. Wells Fargo has also announced a ten-point
environmental commitment to more effectively integrate
environmental responsibility into its business practices and
procedures.
Recent controversies
Wells Fargo has attracted many vocal detractors who protest their
business practices, customer service, fee levels, and other aspects
of the company. There is even a project dedicated to tracking all
alleged instances of
corporate
malfeasance, especially ongoing investigations into alleged
predatory lending practices in
Wells' mortgage division.
Wells Fargo has been the target of activist actions because they
are one of the largest investors into the
GEO
Group. The GEO Group operates private prisons and immigrant
detention facilities which have been criticized for serious abuses
of detainees.
In September 2003,
New
York State Attorney General Eliot
Spitzer sought information about the lending practices of Wells
Fargo and other national banks. Two suits seeking injunctive relief
were filed against Spitzer, one by the Office of the Comptroller of
Currency and one by the Clearinghouse association of banks,
asserting that Spitzer had no authority to regulate the activities
of national banks. The suits both resulted in the granting of
injunctive relief preventing the
continuation of Spitzer's efforts to obtain bank information,
including Wells Fargo information.
In
December 2005, the parachurch group Focus on the Family
ended its banking relationship with Wells
Fargo. This was due to Wells Fargo's support of the
gay rights movement when the company
announced that it was matching contributions to
GLAAD. Wells Fargo continued the program and received
widespread support in the face of the boycott, which had no other
high-profile participants.
The relationship between the bank's Board of Directors and certain
activist shareholders has at
times been contentious. The Board of Directors has recommended
voting against every single shareholder proposal since 2002. Many
of these proposals were warnings to the company, heeding them to
stop predatory lending and other controversial practices.
Illinois Attorney General
Lisa Madigan
filed suit against Wells Fargo on July 31, 2009, alleging that the
bank steers African-Americans and Hispanics into high-cost
subprime loans. A Wells Fargo spokesman responded
that “The policies, systems, and controls we have in place –
including in Illinois – ensure race is not a factor…”
Wells Fargo corporate buildings
- Wells Fargo Center in
Los Angeles,
California

- Wells Fargo
Place in Saint Paul,
MN

- Wells Fargo Center
in Minneapolis, MN
- Wells Fargo Center
in Denver,
CO
- Wells Fargo Center in
West Des
Moines, IA

- Wells Fargo Plaza
in Houston,
TX
- Wells Fargo Plaza
in Phoenix, Arizona
- Wells Fargo Center
in Portland,
OR
- Wells Fargo
Center
in Salt Lake City, UT
- Wells Fargo Center
in Sacramento, CA
- Wells Fargo Headquarters
in San
Francisco, CA

- Wells
Fargo Plaza in El Paso,
TX

- Wells Fargo Center in
Albuquerque,
NM

- Wells Fargo Tower in
Colorado
Springs, CO

- Wells Fargo Center in Seattle, WA

- Wells
Fargo Center in Boise,
ID

- Wells Fargo Center in Spokane, WA
- One Wachovia Center
in Charlotte, North Carolina
- Duke Energy Center
(Formerly; Wachovia Corporate Center) in Charlotte
- leasing some floors of the Building
Image:Wachoviahq.jpg|Wachovia
headquarters
- North Carolina
, will succeed as Headquarters for East Coast
Operations of Wells FargoImage:WellsFargoCenter.jpg|Wells Fargo Center in
Los
Angeles
Image:Wells Fargo Center from
Foshay.jpg|Wells Fargo Center
in Minneapolis
Image:Wellsfargocenterdenver1.JPG|Wells Fargo
Center
in Denver
See also
Notes
References
External links