I’m not saying it can’t happen, but the plan to bulk up Investment Banking feels like a pipe dream. We’ve never been known to be a player in that market. There are too many other firms, that already have the prestigious reputation in that segment, whom we will be attempting to compete with. It’s like Texas Roadhouse trying to offer elevated fine dining. I love Texas Roadhouse, but they know what they do well and aren’t trying to be something they are not.
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Nahhhh, they just haven't hired me brah. I just got here. They are doing some external hiring. I'ma bring the fire.
If a bank with almost $2 trillion in assets blames an "asset cap" for its inability to be profitable, you are believing a lie. The better question is why any big company would want to move their business to WF over their current bank.
I understand WHY we need to bulk up this business: because we are limited in our ability to earn money due to the asset cap, low interest rates and loss of a % of mortgage business. But we are last in line, as usual, and we don’t have the expertise or the reputation to pull it off. It’s right up there with our other failed attempts to play with the big boys.
Examples: Expand Market Making and electronic execution services, attempting to compete with firms like Citadel and Virtu (Hired big-talkers from other firms at exorbitant salaries): FAILED. Expand institutional business to compete with firms like Goldman and Morgan Stanley (Hired big-talkers from other firms at exorbitant salaries): FAILED.
I see where OP was going. If I want something done right, I will go straight to the financial firms that have a long and proven successful track record. I’m not going to go to the financial firm who has been in the industry forever, but only recently decided to bulk up that part of the business. Especially if that firm is recovering from a tarnished reputation. What does Wells Fargo bring to the table and why would I take the risk when I don’t have to?
Op, it’s more like Wells is autozone and investment banking is McDonalds so to increase revenue we need to channel Cottonelle and refocus efforts into a Kellogg’s type strategy so we can ultimately be more like the NFL hosting Cloud based services to download the internet under the guidance of Betty White
While you are right, you also miss a meaningful point. Yes CIB is not Goldman or Morgan Stanley. However, CIB does lend to many corporate clients because of the massive $2trillion balance sheet. That is a great opportunity. In other words, CIB needs to pivot and demand the capital markets cross sell when putting up WFC balance sheet to fund clients' balance sheets. We do that much more than GS, MS, and all the boutiques out there. For that reason, beefing up CIB is a worthwhile strategy. It's too bad the asset cap had to happen and a new mgmt team to make that happen.
Wells Fargo is a kid trying to get a seat at the big boys’ table. Pipe dream indeed. We can’t even get our name on a decent IPO as a lower tier part of the selling group.
The only deals we ever get is because we overpriced them and then sacked our customers. They fall apart as soon as they open for trading. No thank you.
This is a silly comparison. WF needs to diversify away from interest rate spread income and into more fee income model. Growing the investment bank LOB also isn’t hindered by the FRB’s asset cap. As far as the restaurant comparison goes you do realize that Darden Restaurant group owns Olive Garden & The Capital Grille?
You think Bank of America, CITI and the rest offer "fine dining"?