Wells Fargo Financial Anlysis
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In March 1852 Henry Wells and William Fargo founded Wells, Fargo & Co. to serve the West. The new company offered banking (buying gold, and selling paper bank drafts as good as gold) – and express (rapid delivery of the gold and anything else valuable). Wells Fargo opened for business in the gold rush port of San Francisco, and soon Wells Fargos agents opened offices in the other new cities and mining camps of the West. In the boom and bust economy of the 1850s, Wells Fargo earned a reputation of trust by dealing rapidly and responsibly with peoples money. In the 1860s, it earned everlasting fame – and its corporate symbol – with the grand adventure of the overland stagecoach line. In 1888, Wells Fargo became the countrys first nationwide express company. It adopted the motto “Ocean-to-Ocean” to describe its service that connected over 2,500 communities in 25 states, and “Over-the-Seas” to highlight its lines linking Americas increasingly global economy.
Today, Wells Fargo & Company is a diversified financial services company with $428 billion in assets, providing banking, insurance, investments, mortgage and consumer finance to more than 23 million customers from more than 6,000 stores and the internet (wellsfargo.com) across North America and elsewhere internationally. Wells Fargos vision statement reads “We want to satisfy all of our customers financial needs, help them succeed financially, be the premier provider of financial services in every one of our markets, and be known as one of Americas great companies.”
Goals
We must offer better products and a broader product line than our local competitors,
Grow annual earnings per share at a double-digit compound rate,
Be among the very best in ROE with a 20 percent or higher return.
Lose fewer team members and lose fewer customers every year than any other competitor in our industry.
Grow revenue twice as fast as expenses.
Sell at least eight products to every customer.
Ten Strategies
1. Investments, Brokerage, Trust and Insurance This
is a prime example of “going where the money is.”
At year-end 2003, 14 percent of our banking
earnings came from investments, brokerage, trust
and insurance–over double where we were a few
years ago–but its still not good enough. We must
increase that to at least 25 percent. Less than five
percent of our 11 million banking households have
relationships with our brokerage business. Less
than two percent buy insurance through us.
2. “Going for Gr-Eight” Double the number of
products our consumer and business customers
have with us to eight products per customer.
3. Doing it Right for the Customer Our product is
service and advice. We want to be advocates for our
customers, put them at the center of everything we
do and give them such outstanding service and
advice that they will give us all their business, honor
us with repeat purchases and rave about us to their
family, friends and business associates.
4. Banking with a Mortgage and a Home Equity Loan
We want all our mortgage customers in our 23
banking states to bank with us. We also want all our
banking customers–who need a mortgage or a
home equity loan–to get it through Wells Fargo.
Eighty one percent of our banking households that
have a mortgage have it with one of our competitors.
Only about 18 percent of our mortgage customers
have a home equity loan with us.
5. Wells Fargo Cards in Every Wells Fargo Wallet
Every one of our creditworthy customers should
have a Wells Fargo credit card and debit card.
Only twenty-seven percent of our banking customers
have a credit card with Wells Fargo. Eighty-six
percent have a Wells Fargo debit card.
6. When, Where and How As a national leader in
distributing financial services, we offer customers
more choices than any other company–traditional
stores, supermarket stores, ATMs, Phone Banks,
internet and mail–when, where and how they want
to use them. Very few, if any, customers are singlechannel
users. We integrate these channels so we
can offer all our products and services through all of
them–any time, anywhere our customers want to
be served.
7. “Information-Based” Marketing We must take full
advantage of what we know about our customers
needs so we can offer them the choice, convenience
and price benefits of giving us all their business. We
use technology not to de-personalize service but to
personalize it. Thanks to technology, we know how
many products each customer has with us. We know
which