This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Wells Fargo Warms to Investment Banking

Wells Fargo's (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.

" Wells 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 Citigroup (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.

1 of 5

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Submit an article to us!
SYM TRADE IT LAST %CHG
BAC $16.11 0.00%
C $53.76 0.00%
GS $197.53 0.00%
JPM $63.61 0.00%
MS $37.51 0.00%

Markets

DOW 18,024.06 +183.54 1.03%
S&P 500 2,108.29 +22.78 1.09%
NASDAQ 5,005.3910 +63.9670 1.29%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs