Wells Fargo Essay

Wells Fargo, as a diversified financial holding company, provides retail, commercial, and corporate banking services to its customers through its subsidiaries. It offers various banking and financial services through full-service banking offices. It is one of the largest banking groups in the United States with over 20 million customers and has operations in 24 states through 6,000 offices across the United States. The company primarily operates in the United States, but also has operations in Canada and Latin America. Wells Fargo was incorporated in 1929. Today, the company employs around 158,000 people (as of January 1, 2007). Wells Fargo is a California-based company. It is headquartered at 420 Montgomery Street, San Francisco, California. Wells Fargo is quoted in the New York Stock Exchange with the ticker symbol WFC. It has approximately 90,000 shareholders (as of January 1, 2007).

Wells Fargo primarily conducts its operations through three business segments: community banking, wholesale banking, and Wells Fargo Financial. The community banking segment provides various banking and diversified financial products and services to consumers and small businesses across the United States. It also offers investment management, wealth management insurance, and securities brokerage. This division provides mutual fund products, personal trusts, and agency assets as well as different types of loans. This division also provides receivables financing, inventory financing, equipment leases, real estate financing, small business administration financing, cash management, payroll services, and retirement plans. The division serves customers through a wide range of channels, including traditional banking stores, in-store banking centers, call centers, business centers, automated teller machines (ATMs), and internet branches.

The wholesale banking division mainly provides commercial, corporate, and real estate banking products and services, including traditional commercial loans and lines of credit, letters of credit, asset-based lending, equipment leasing, mezzanine financing, international trade facilities, foreign exchange services, treasury management, investment management, institutional fixed income, and equity sales. The wholesale banking division also offers construction loans for commercial and residential development, land acquisition and development loans, secured and unsecured lines of credit, interim financing arrangements for completed structures, rehabilitation loans, affordable housing loans and letters of credit, permanent loans for securitization, commercial real estate loan servicing, and real estate and mortgage brokerage services.

The Wells Fargo Financial segment provides consumer financing and auto financing. The consumer finance sub segment provides direct consumer loans and real estate loans to retail clients. Also, it purchases sales finance contracts from retail merchants scattered in the United States, Canada, and some other countries in Latin America. Auto financing sub segment operations specialize in purchasing sales finance contracts directly from automobile dealers. Wells Fargo Financial also offers credit cards, lease agreements, and other commercial financing.

Wells Fargo was founded in 1852 as Wells, Fargo & Company by Henry Wells and William G. Fargo, the two founders of American Express Company, to provide express (rapid delivery of gold and anything else valuable) and banking services (buying gold and selling paper bank drafts as good as gold) in the western United States during the California gold rush era. In 1905 Wells Fargo separated its banking and express operations. In 1929 the company registered as Northwest Bancorporation and the name later changed to Norwest Corporation in 1983. The company, in its current form, was formed in 1998, following a merger between Norwest Corporation and Wells Fargo & Company. As a result of the merger, the new enterprise was named Wells Fargo & Company. Following the merger, Wells Fargo continued to grow through various acquisitions.

Wells Fargo is regarded as a successful company in many aspects. One of the reasons may be its advantage of owning a well-established distribution network. The company enjoys a leading position in the highly competitive U.S. banking sector because of its wisely decided investments, such as having the largest telephone banking network in North America. On the contrary, one of the most critical disadvantages for Wells Fargo might be its high exposure to real estate investments. Given the American subprime mortgage crisis in recent years, Wells Fargo is facing decreasing revenues from its over focused real estate business. On December 31, 2008, Wells Fargo merged with Wachovia Corporation, which had experienced even more crippling losses in the subprime mortgage crisis.


  1. Pat Allen, “Wells Fargo Payments Strategist on Electronification, Risk and Competition,” Banking Strategies (v.82/3, 2006);
  2. Robert J. Chandler, Servant of the People: Wells Fargo in Old Town San Diego, 1852–1870 (Douglas McDonald, 2006);
  3. Philip L. Fradkin, Stagecoach: Wells Fargo and the American West (Simon & Schuster Source, 2002);
  4. Sesil Watson, “The Business of Customer Experience: Lessons Learned at Wells Fargo,” Interactions (v.15/1, 2008);
  5. Wells Fargo, www.wellsfargo.com (cited March 2009).

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