Wells Fargo, the US’s largest bank by market value and the epitome of domestically focused American banking, has drawn up plans to build up its international operations.
The group wants to expand into 20 markets around the world, providing full corporate banking services to its US customers as they expand globally.
At present Wells generates a small fraction of its $81 billion annual revenues from operations outside the US. The bank does not publish a financial breakdown of its businesses by geography but only 2 percent of its 260,000 staff are based outside the US.
Wells inherited a network of representative offices around the world when it acquired troubled rival Wachovia at the height of the financial crisis in 2008 but until now it has done little to build on them.
Most of those operations focus only on providing wholesale services to other banks and financial institutions, such as payment services.
Under its new strategy, Wells will open full corporate banking services in 20 countries, including the UK, Germany, the Netherlands, France, China, Hong Kong, Australia, Japan, India, South Korea and Singapore.
The drive is led by Richard Yorke, the British-born former chief executive of HSBC China, who is the group’s global head. Wells sees scope to grow significantly as mid-market US companies, its heartland corporate customer base, eye expansion opportunities abroad, said Mr Yorke.
The bank is also filling in gaps left when Wells’ former international finance co-operation deal with HSBC ended after the Wachovia takeover.
The expansion path has been eased by the retreat of some competitors in some markets and the relative financial weakness of others. Wells’ push into corporate banking outside the US parallels a move by JPMorgan, begun in the past two years, with both banks seeking to capitalise on difficulties faced by rivals such as Citigroup and Bank of America Merrill Lynch.
Wells aims to build on its corporate banking successes at home, where it is the leading supplier of credit to the agriculture, energy and commercial real estate sectors, as well as across the small and midsized business community.
As part of its expansion, Wells has appointed James Johnston to a new, London-based position as head of Europe, Middle East and Africa. The bank has begun financing new commercial real estate projects in London, reversing a freeze on a portfolio of UK property finance inherited from Wachovia.
Wells has recently been on the acquisition path, buying up portfolios of unwanted assets from banks that are under pressure to shrink. A fortnight ago, the group bought BNP Paribas’ North American energy business. Further similar deals are likely to follow.