Essay on Wells Fargo

Submitted By cliffb90
Words: 3065
Pages: 13

Wells Fargo & Company is an American multinational banking and financial services holding company headquartered in San Francisco, California, with "hubquarters" throughout the country. It is the fourth largest bank in the U.S. by assets and the largest bank by market capitalization. Wells Fargo is the second largest bank in deposits, home mortgage servicing, and debit cards. In 2011, Wells Fargo was the 23rd largest company in the United States.
In 2007 it was the only bank in the United States to be rated AAA by S&P, though its rating has since been lowered to AA- in light of the financial crisis of 2007–2012. 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.
Wells Fargo is one of the "Big Four banks" of the United States, along with JPMorgan Chase, Bank of America and Citigroup—its main competitors. The company operates accross 35 countries and has over 70 million customers globally. In 2012, it had more than 9,000 retail branches and over 12,000 automated teller machines in 39 states and the District of Columbia. As of July 12, 2013, Wells Fargo became the world's biggest bank by market capitalization, worth $236 billion, beating ICBC.
In February 2014 Wells Fargo was named the world's most valuable bank brand for the 2nd year running in The Banker and Brand Finance study of the top 500 banking brands.
History
The current Wells Fargo is a result of a 1998 merger between Minneapolis-based Norwest Corporation and the original Wells Fargo. Although Norwest was the nominal survivor, the new company kept the Wells Fargo name to capitalize on the long history of the nationally recognized Wells Fargo name and its trademark stagecoach . After the acquisition, the parent company kept its headquarters in San Francisco. The company's current tagline, "Together we'll go far" also references the stagecoach motif, its customers, and represents the company name itself in a transposed way .
In-store branches
There are many 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.
Wachovia acquisition
On October 3, 2008, Wachovia agreed to be bought by Wells Fargo for about $14.8B in an all-stock transaction. This news came four days after the Federal Deposit Insurance Corporation made moves to have Citigroup buy Wachovia for $2.1B. Citigroup protested Wachovia's agreement to sell itself to Wells Fargo and threatened legal action over the matter. However the deal with Wells Fargo overwhelmingly won shareholder approval since it valued Wachovia at about 7 times what Citigroup offered. To further ensure shareholder approval, Wachovia issued Wells Fargo with preferred stock holding 39.9% of the voting power in the company.
On October 4, 2008, a New York state judge issued a temporary injunction blocking the transaction from going forward while the situation was sorted out. Citigroup alleged that they had an exclusivity agreement with Wachovia that barred Wachovia from negotiating with other potential buyers. The injunction was overturned late in the evening on October 5, 2008, by New York state appeals court. Citigroup and Wells Fargo then entered into negotiations brokered by the FDIC to reach an amicable solution to the impasse. Those negotiations failed. Sources say that Citigroup was unwilling to take on more risk than the $42 billion that would have…