Wells Fargo seizes investment banking opportunity
Wells Fargo and Company, which has long prided itself on conservative practices has committed to investment banking by creating the Wells Fargo Secuities brand. WFAE's Simone Orendain reports: In recent years, investment banking and capital markets became more embroiled in complex, hard to unload investment products until entire companies collapsed. Lehman Brothers imploded and others like Goldman Sachs and Merrill Lynch needed to be held up by major banks. Analysts say now, the shift in the industry has brought a major opportunity for banks like Wells Fargo. Wells Fargo Chief Executive Officer John Stumpf says in a statement that Wells Fargo Securities will give the company an "enormous opportunity to become one of the top customer-focused investment banks in the country." Standard and Poors investment analyst Stewart Plesser says Wells Fargo is a new player in an industry that's been long dominated by the likes of Merrill Lynch. "I think the traditional players in the business have a head start with Wells. But what Wells has is first of all they have a very large and diverse customer base. They certainly can build this business," he says. Plesser says for now banks are steering clear of high risk, complex investment products such as mortgage-backed securities. He expects Wells Fargo Securities to take a conservative approach. The bank is known for being a one-stop shop and services already existing customers. Wells Fargo acquired Charlotte-based Wachovia late last year. Plesser says Wells Fargo will likely try to keep costs down so it's unlikely the bank would add or relocate investment banking offices to Charlotte any time soon.