A qualitative look at loan king Wells Fargo
- Banking is largely a distribution-based business.
e.g WFC strongest in west; JPM strongest in east; BAC strongest in metropolitan area
- Relation-building is essential to banking;
- International Presence is Important (only 5.77% from International Market);
- WFC leads in the loans (by end of 2013, 1 in every 3 retail mortgages);
- Auto loan king;
- Credit and Debit Cards (can improve to catch up rivals);
- Strong in Retail/Consumer Loans;
- Second Largest Deposit Base;
- Largest Small Business Lender;
- Largest Auto Lender;
- Cross-Selling;
- Commercial and Retail each 50% business, with highest industrial sectors in investors,
cyclical retailers, oil and gas, and food and beverage, with each about 2% of the business;
- Strong position in commercial real estate (4%);
- Wealth Management, Brokerage, and Retirement Planning (fee based, strong customer base);
- Abbot Downing
- Weak In Investment Banking (JPM - Bear Sterns; C - Salomon Smith Barney;
BAC - Merryl Lynch; WFC - Wochovia)
- Overall, most competitive
WFC Strategy --- slow and steady
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- Banking is largely a distribution-based business.
e.g WFC strongest in west; JPM strongest in east; BAC strongest in metropolitan area
- Relation-building is essential to banking;
- International Presence is Important (only 5.77% from International Market);
- WFC leads in the loans (by end of 2013, 1 in every 3 retail mortgages);
- Auto loan king;
- Credit and Debit Cards (can improve to catch up rivals);
- Strong in Retail/Consumer Loans;
- Second Largest Deposit Base;
- Largest Small Business Lender;
- Largest Auto Lender;
- Cross-Selling;
- Commercial and Retail each 50% business, with highest industrial sectors in investors,
cyclical retailers, oil and gas, and food and beverage, with each about 2% of the business;
- Strong position in commercial real estate (4%);
- Wealth Management, Brokerage, and Retirement Planning (fee based, strong customer base);
- Abbot Downing
- Weak In Investment Banking (JPM - Bear Sterns; C - Salomon Smith Barney;
BAC - Merryl Lynch; WFC - Wochovia)
- Overall, most competitive
WFC Strategy --- slow and steady
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Wells Fargo summary
- Leading market share in mortgage and auto loans; strong in other retail and commercial loans
- Diversified revenue sources—strong in interest and non-interest income
- Large, low cost deposit base
- Strong risk culture—strengthening it even more
- Experienced management team and satisfied employees
- Strong returns versus peers with lower volatility
- Lower risk profile than large peers
- Broader distribution, scale, and product set than regional banks
