Wells Fargo & Co., which stepped away from its conservative roots with its purchase of Wachovia last year, plans to announce that it will expand its securities business. The move comes amid a profit revival on Wall Street.
The San Francisco-based Wells had mostly avoided the investment-banking and capital-markets business that banks such as J.P. Morgan Chase & Co. and Citigroup embraced and instead focused on plain-vanilla banking. It now plans to "grow and invest" in the securities business that it largely inherited from Wachovia, Wells Chief Executive John Stumpf said in a statement to be released Monday.
Wells Fargo Securities plans to focus on services for outside clients.
The business, to be called Wells Fargo Securities, will face off against established rivals in offering merger advice, stock and bond underwriting, loan syndications and fixed-income trading. One factor behind the move is a rebound on Wall Street, where profits are surging as capital markets stabilize and the credit squeeze makes basic investment-banking businesses more lucrative.
The bank also realized Wachovia had some pretty good lines of business that could serve its clients. A Wells Fargo spokeswoman declined further comment.
Its Dec. 31 acquisition of Charlotte, N.C.-based Wachovia gave Wells a bigger platform in those areas. Trading income and investment fees accounted for $3 billion in revenue during Wells' first quarter, or 14% of the total, with about $2.2 billion of that amount contributed by Wachovia.
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