Close your eyes and think of the most valuable bank in U.S. history. Nope, it’s Wells Fargo. The San Francisco bank just surpassed the old record set by Citigroup in 2001, and it did so in an old-school and somewhat boring fashion: retail deposits.
Wells Fargo currently derives an astounding 78% of its funding from deposits, following Chief Executive Officer John Stumpf’s safe, consumer-focused model. However, Wells is simultaneously spreading its wings into other businesses as the mortgage industry is being reshaped. No longer can Wells Fargo depend on its sprawling mortgage business that was buoyed by the refinancing boom that has since ended.
The bank’s growth plans are multiple. First, it is expanding into Europe with its bread-and-butter businesses: real estate and asset-based lending. But it is also straying into newer corners. Financial News is reporting that Wells is currently looking to hire in derivatives services and credit trading, areas where other banks in the region are cutting back.
Elsewhere, Wells is following in the footsteps of other bulge bracket banks by expanding its presence in asset management. The bank will act aggressively on all fronts, meaning acquisitions, bigger sales targets and more hiring, particularly in Europe. The initiative even has a rather blunt internal nickname: "Big Hairy Audacious Goal,” according to the Wall Street Journal. They plan is to target a greater number of institutional investors - like pension funds - and even possibly expand into exchange-traded funds.
Finally, following the high-profile hack of J.P. Morgan, Wells Fargo is stepping up its recruitment efforts in cyber security. The bank is planning the launch of three “Cyber Threat Fusion Centers,” and employs a team of roughly 60 cyber security pros.
Embarrassing Ways Bankers Land Deals (eFinancialCareers)
If you want to work in investment banking, be good with numbers, have strong people skills and know how to get into spandex and a cape during rush hour.
Arrogant? Lazy? Junior Bankers Hit Back (eFinancialCareers)
2014 was a year in which the tide turned. From consistently flowing in a direction favorable to senior bankers, it reversed and juniors got a lot more benefits.
Banks Looking to Play Good Defense (WSJ)
Activist investing couldn’t be hotter right now. While that’s bad news for corporate boards, it’s good news for banks that are being hired to advise them on defense strategies. Banks are now staffing up in these anti-activist advisory units.
Pimco on Equities Hiring Push (Bloomberg)
While Pimco has been busy cleaning up the Bill Gross debacle, the bond giant has been quietly staffing up in equities. It just poached two more money managers from Schroders as it looks to expand beyond fixed income. Pimco has made several other hires in equities over the last few months.
Massive Whistleblower Award (NY Times)
A former Countrywide Financial executive made more than $57 million this year, and he didn’t actually have to do any real work. Edward O’Donnell received the money as part of a whistleblower award for ratting on his former employer about how they sold shoddy mortgage-backed securities. His actions led to a $16.65 billion fine for Bank of America, which acquired Countrywide in 2008.
Traders (Finally) Best Bankers (Business Insider)
Traders and investment bankers at Goldman Sachs went head-to-head in a series of fitness competitions, including rowing and biking. The traders won, which is a nice consolation prize for what will certainly be a loss come bonus season.
The Perfect Gift (Business Insider)
We have found the perfect gift for the banker that has everything. Fine leather shoes with a detachable heel that holds a small bottle of Johnnie Walker scotch.
Buzz Around the Office
Congrats, You’re Rejected (Bloomberg)
Johns Hopkins University sent “welcome” notes to 294 early-decision applicants who were actually rejected two days later. That hurts.
Quote of the Day: “You’ll always be busy anyway, and people remember the quality of your work, not how much you can take on.” – Mark Hatz, a former M&A associate at Goldman Sachs and Perella Weinberg Partners on why you shouldn’t ever ask for more work