(WFC - Get Report) iconic stagecoach could soon be pulling up alongside the town cars favored by its Wall Street competitors.
Wells, whose quaint horse-drawn covered wagon logo is an apt metaphor for its traditional, risk-averse nature, has decided to build out its investment banking franchise. The move represents an about-face for Wells, which initially planned to sell off or wind down some key
Wachovia operations that CEO John Stumpf deemed "not compatible" with its "vision and values."
The San Francisco-based company's roll of the dice on Wall Street is designed to take advantage of the disappearance or downsizing of big investment banks. The initiative, however, will be on Wells Fargo's own terms. The company has spent nine months deciding which Wachovia assets to keep, then soldering together its legacy investment banking division with the newly acquired, and arguably stronger, operations. The bank plans to unveil the new enterprise next week.
appears to be modifying the rules somewhat to run the business more in sync with its philosophy," JPMorgan analyst Vivek Juneja noted in a report earlier this month, referring to Wells' decision to expand the investment banking arm.
Wells earlier this month said it would unveil the new franchise the week of July 6, but couldn't discuss details further until that time.
Wells had first offered to purchase Wachovia's banking operations alone, but ultimately bought Wachovia's brokerage and asset-management businesses in the deal. Wells trumped an agreed-to deal between
(C - Get Report)
and Wachovia, with a $15 billion offer that -- unlike Citi's deal -- required no government assistance. At the time it seemed clear that, as in any combination of two major national banks with different cultures and revenue streams, there would be some overlap, perhaps some layoffs, and some non-essential lines of business tossed to the wayside.