Wells Fargo & Co., the U.S. bank with the largest branch network, plans to expand in China and add more staff as it joins rivals in boosting assets in the world’s second-largest economy.
“We will grow the business in a way that is prudent and adds value to our customers,” David Hoyt, the San Francisco- based company’s wholesale-banking chief, said in an interview in Shanghai last week. “We are optimistic we will grow quickly and will add as many people as possible to support ourselves.”
Wells Fargo (NYSE: WFC), which has a branch in Shanghai with 70 people and a representative office in Beijing employing 6, is also applying for a license to do yuan-denominated business in China, according to Richard Yorke, who leads the company’s international group.
China is the world’s third-largest banking market, behind the U.S. and Japan. New York-based Citigroup Inc. (NYSE: C) and JPMorgan Chase & Co. (NYSE: JPM) are among foreign banks that boosted their combined assets in China by 29 percent last year and increased their share of the $15 trillion market to 1.85 percent, according to the nation’s banking regulator.
“With the increasing business activity between the U.S. and China and the strong growth prospect for China, our customers have increasing needs,” Hoyt said. “The biggest new opportunity for us is to satisfy our domestic customers’ financial needs internationally.”
Wells Fargo has no plan to acquire a local lender in China, Hoyt said.
In expanding the international business, Wells Fargo is relying on relationships and offices acquired in the 2008 purchase of Wachovia Corp., the Charlotte, North Carolina-based lender that came within 24 hours of bankruptcy.
Wells Fargo added Wachovia’s 53 international offices and a “long history of international correspondent banking,” according to a May 2010 company presentation. So-called correspondent banking involves partnering with local banks to make loans and collect deposits.
Wells Fargo’s international presence is the smallest of the top four U.S. commercial banks. The company had $32.9 billion in foreign loans, or 4.4 percent of total loans at the end of December, according to a year-end filing. It had about $55 billion in deposits.
Wells Fargo named Yorke to his post in June, hiring him from HSBC Bank (China) Company Ltd, where he was most recently chief executive officer, according to a statement at the time. Yorke was the first director of the China Banking Association’s Foreign Bank Working Committee in 2007 and, in 2009, was named an “Honorary Citizen of Shanghai,” the company said in the statement.
While Yorke was at HSBC, Wells Fargo had jointly operated a trade bank with the London-based company before purchasing the remaining stake for $171 million in February 2010, according to a statement. The two companies formed the Wells Fargo HSBC Trade Bank in 1995.