Wells Fargo Financial Analysis

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 Fargo’s 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 people’s 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 country’s 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 America’s 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 Fargo’s 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 America’s 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 it’s still not good enough. We must increase that to at least 25 percent. Less than five percent o...

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...excellent customers. We also need to aggressively cross-sell households that have the potential to become premier customers. We must focus even more on closing the “back door”—reducing, by half, the number of customers who leave us or give us less of their business.

10. People as a Competitive Advantage Most importantly, we must do even better in training, rewarding and recognizing all our team members.

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We must build an inclusive work environment and a diverse organization. All members of our team should know they’re valued, that they can go as far as their ability and desire to work hard will take them. We must be a company that encourages a healthy balance in work and home life. Our success has as much to do with attitude as aptitude—what’s in our hearts not just our heads. Our success depends on how much our team members care for their customers, for each other, their communities and our stockholders. People commit themselves to other people, not organizations. Processes are important but they don’t do the work, people do. Because we believe in people as our competitive advantage, we’ll continue to invest in our “human capital.” It’s the most important, valuable investment