Wells Fargo & Company is an American
international banking and financial services holding company headquartered in San Francisco, California , with "hubquarters" throughout the country.[2] It is the world's second-largest bank by market capitalization [3] and the third largest bank in the U.S. by assets.[4] In July 2015, Wells Fargo became the world's largest bank by market capitalization, edging past ICBC , [4] before slipping behind JP Morgan Chase in September 2016, in the wake of a scandal involving the creation of over 2 million fake bank accounts by Wells Fargo employees.Wells Fargo surpassed Citigroup Inc. to become the third-largest U.S. bank by assets at the end of 2015. Wells Fargo is the second-largest bank in deposits, home mortgage servicing, and debit cards. The firm's primary U.S.
operating subsidiary is national bank Wells Fargo Bank, N.A. , which designates its main office as Sioux Falls, South Dakota . Wells Fargo in its present form is a result of a merger between San Francisco–based Wells Fargo & Company and Minneapolis-based
Norwest Corporation in 1998 and the subsequent 2008 acquisition of Charlotte -based Wachovia. Following the mergers, the company transferred its headquarters to Wells Fargo's headquarters in San Francisco and merged its operating subsidiary with Wells Fargo's operating subsidiary in Sioux Falls. Along with JPMorgan Chase , Bank of America , and and Citigroup, Wells Fargo is one of the "Big Four Banks " of the United States. [5] As of December 31, 2015, it had 8,700 retail branches and 13,000
automated teller machines.[6] The company operates across 35 countries and has over 70 million customers globally.
In February 2014, Wells Fargo was named the world's most valuable bank brand for the second year running[7] in The Banker and Brand Finance study of the top 500 banking brands. [8] In 2016, Wells Fargo ranked 7th on the Forbes Magazine Global 2000 list of largest public companies in the world [6] and ranked 27th on the Fortune 500 list of the largest companies in the
United States . [9] In 2015, the company was ranked the 22nd most admired company in the world, and the 7th most respected company in the world. [6] As of October 2015, the company had a credit rating of AA−. [10] However, for a brief period in 2007, the company was the only AAA-rated bank, reflecting the highest credit rating from two firms.
Community banking
The Community Banking segment includes Regional Banking, Diversified Products, and Consumer Deposits groups, as well as Wells Fargo Customer Connection (formerly Wells Fargo Phone Bank, Wachovia Direct Access, the National Business Banking Center, and Credit Card Customer Service). Wells Fargo also has around 2,000 stand-alone mortgage branches throughout the country. [12] There are mini-branches located inside of other buildings, which are almost exclusively grocery stores, that usually contain ATMs, basic teller services, and, space permitting, an office for private meetings with customers. [13] In March 2017, Wells Fargo announced a plan to offer smartphone-based transactions with mobile wallets including Wells Fargo Wallet, Android Pay and Samsung Pay.
Consumer lending
As of Q3 2011, Wells Fargo Home Mortgage was the largest retail mortgage lender in the United States, originating one out of every four home loans. [15] Wells Fargo services $1.8 trillion in home mortgages, the second largest servicing portfolio in the U.S. [16] It was reported in 2012 Wells Fargo reached 30% market share for US mortgages, however, the then-CEO John Stumpf had said the numbers were misleading because about half of that share represented the aggregation of smaller loans that were then sold on in the secondary market. In 2013, its share was closer to 22%; of which eight percentage points was aggregation.
Wells fargo private student loans
Wells Fargo private student loans are available to students to pay for college expenses, such as tuition, books, computers, or housing. [18] Loans are available for undergraduate , career and
community colleges, graduate school , law school and medical school. Wells Fargo also provides private student loan consolidation and student loans for parents.
Wholesale banking
Its 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 capital markets and investment banking services through Wells Fargo Securities. One area that is very profitable to Wells Fargo, however, is asset-based lending : lending to large companies using accounts receivable and inventory as collateral, though less traditional assets are often included in the collateral package. Historically, this type of lending has been done when normal routes of raising funds, such as the Capital Markets or unsecured bank loans, have been exhausted. The main business unit associated with this activity is Wells Fargo Capital Finance. 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).
Equipment lending
Wells Fargo has various divisions that finance and lease equipment to different types of companies. One venture is Wells Fargo Rail , which in 2015 completed the purchase of GE Capital Rail Services and merged in with First Union Rail . Wells Fargo Equipment Finance is the country's largest equipment financer and nearly doubled in size after it purchased GE Capital's equipment finance division effective March 1, 2016.
Cross selling
A key part of Wells Fargo's business strategy is cross-selling , the practice of encouraging existing customers to buy additional banking products. [20] Customers inquiring about their checking account balance may be pitched mortgage deals and mortgage holders may be pitched credit card offers in an attempt to increase the customer's profitability to the bank. [21][22] Other banks have attempted to emulate Wells Fargo's cross-selling practices (described by The Wall Street Journal as a
hard sell technique); [21] Forbes magazine describes Wells Fargo as "better than anyone" at the practice.
History of Wells Fargo Securities
Wells Fargo Securities was established in 2009 to house Wells Fargo's capital markets group which it obtained during the Wachovia acquisition. Prior to that point, Wells Fargo had little to no participation in investment banking activities, though Wachovia had a well established investment banking practice which it operated under the
Wachovia Securities banner.
Wachovia's institutional capital markets and investment banking business arose from the merger of Wachovia and First Union. First Union had bought Bowles Hollowell Connor & Co. on April 30, 1998 adding to its merger and acquisition , high yield,
leveraged finance , equity underwriting,
private placement, loan syndication, risk management , and public finance capabilities. [54]
Legacy components of Wells Fargo Securities include Wachovia Securities ,
Bowles Hollowell Connor & Co. , Barrington Associates, Halsey, Stuart & Co. , Leopold Cahn & Co. , Bache & Co. . Prudential Securities , A.G. Edwards, Inc. and the investment banking arm of Citadel LLC.
Environmental Records
In 2009, Wells Fargo ranked #1 among banks and insurance companies, and #13 overall, in Newsweek Magazine ’s inaugural "Green Rankings" of the country’s 500 largest companies. [57]
So far, Wells Fargo has provided more than $6 billion in financing for environmentally beneficial business opportunities, including supporting 185 commercial-scale solar photovoltaic projects and 27 utility-scale wind projects nationwide. [58]
As a member of the U.S. Environmental Protection Agency 's Climate Leaders program, Wells Fargo aims to reduce its absolute greenhouse gas emissions from its U.S. operations by 35% below 2008 levels by 2020. [59]
Wells Fargo has launched what it believes to be the first blog among its industry peers to report on its environmental stewardship and to solicit feedback and ideas from its stakeholders.