Wells Fargo Goes Global, Finally

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK ( Trefis) -- Wells Fargo ( WFC), the bank with the largest market capitalization in the U.S., has laid out plans to expand its global footprint.

The bank, which historically has focused on U.S. operations, wants to leverage its stable domestic business and extend corporate banking services to 20 other countries. Wells Fargo has already been enhancing its service portfolio in recent months with the acquisitions of Burdale Financial Holdings Limited and EverKey Global Partners.

Geographical diversification comes as the logical next step for the bank, which reported record figures for 2011 even as many competitors put up weak numbers in the challenging period. And with players like Bank of America ( BAC) and Citigroup ( C) cutting back on their ambitious global expansion plans, the time looks right for Wells Fargo to step in.

We maintain a $30 price estimate for Wells Fargo's stock , which is about in line with current market price.

See our complete analysis of Wells Fargo here.

Wells Fargo has shortlisted 20 developed and promising countries where it intends to start full corporate banking services. Prominent locations in the list are the U.K., Germany, the Netherlands, France, China, Hong Kong, Australia, Japan, India, South Korea and Singapore.

As of now, foreign loans form a very small part of Wells Fargo's business. All of its foreign loans are handed out for commercial purposes. They make up about 11% of its total commercial lending portfolio, and less than 5% of its total outstanding loans.

Our analysis of Wells Fargo shows that foreign loans are the smallest contributor to its value -- as noted in the chart above -- constituting less than 1% of our estimated value for the bank. There clearly is ample room for growth in this area, and this global expansion is definitely a step in the right direction

Click here to find out how a company's products impact its stock price at Trefis.

Like our charts? Embed them in your own posts using the Trefis Wordpress Plugin.
This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

If you liked this article you might like

How to Get Rich Using Warren Buffett's Favorite Stock Market Indicators

China's Banks Halt Business With North Korea Per United Nations Sanctions

How to Live Just Like Billionaire Warren Buffett

How to Make a Deal Like Billionaire Investor Warren Buffett

How to Invest Like Billionaire Warren Buffett