Wells Fargo competitors are Citigroup, Bank of America, JP Morgan Chase, Goldman Sachs etc.
Wells Fargo is financial services with headquarters in San Francisco, California. It is only based in America and has no offices outside of the US but then Wells Fargo runs subsidiary companies and affiliates in places such as Canada and 3p other countries that are spread across Latin America, Asia and Europe. By revenue, Wells Fargo is among the top 10 largest banks in the world. The company was founded in 1852 by Thomas Wells and William Fargo to buy gold and sell paper bank drafts. With the booming gold business, it expanded to other cities. Wells Fargo has above 263,000 employees as of 2019 and a revenue turnover of $103.91 billion. Brand Finance named Wells Fargo as the most valuable banking brand in the US and the 5th most profitable American company by Fortune.
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How Wells Fargo Makes Money.
As one of America’s biggest financial institutions, in 2019, the company generated a revenue of $103.92 billion. From their business, the company made its revenue and these segments are; Wholesale banking, community banking, and wealth and investment management.
- Community Banking
From the sales of banking products designed for individual consumers and small businesses, the community banking segment brought in revenues. They include debits and credit cards, auto loans, savings and cheques, mortgages among other lending products. Insurance and investments services are offered by Wells Fargo to 39 states and Washington DC. The Community Banking segment of Wells Fargo accounted for the largest portion of the company’s revenue.
- Wholesale Banking
The bank provides the same service in Wholesale banking as in the Community Banking segment. The wholesale banking segment targets businesses, governments and institutions. Wells Fargo offers corporate trust, treasury management, and equipment services in addition to the regular services they offer.
- Wealth and Investment Management
In the wealth and Investment Management segment, retirement and investment products to individuals, businesses, and institutions are offered through the Wells Fargo Advisors among others. Which comprises the company’s brokerage services and financial planning services to high-value customers.
Some of Wells Fargo’s competitors are listed below.
In 1998, Citigroup was established after the merger of Citicorp which was founded in 1812 as City Bank of New York and Travelers Group founded in 1986 to provide consumer finance, brokerage, insurance, and credit services). It has subsidiaries which include Citibank, Citibank Private Bank, Citibank Europe, Bank Handlowy, and Grupo Financiero Banamex among others. Citigroup is in 97 countries with headquarters in New York City, with a revenue turnover of $103.45 billion in 2019. In the United States, Citigroup is one of the biggest and it is considered an important financial company systematically. Citigroup is the leading issuer of credit cards in the world. The company has 2000,000 as of 2019.
Citigroup operates on a different model from that of Wells Fargo. While Wells Fargo focuses on consumer lending and wealth management, Citigroup targets consumer credit cards and investment banking besides institutional trading operations. Wells Fargo primarily operates within the United States while Citigroup focuses more on the international markets. Citigroup’s revenues have been growing steadily despite its focus on the highly volatile credit card business. Declined revenues has been experienced by Wells Fargo over the past few years due to customer abuse scandals such as opening of fake accounts for customers by employees. It spends more on compliance than on growing its business.
Financial services dealing with commercial banking, investment banking, and wealth management are provided by the Bank of America. Bank of America is headquartered in Charlotte, North Carolina. About 10.73% of all bank deposits in the United States are serviced by the Bank of America. After JPMorgan Chase, it is the second largest financial institution in the United States. In 1998, the bank was established after NationBank merged with Bank America. The Bank of America has 137,071 employees and a revenue turnover of 113.59 billion.
Wells Fargo, the Bank of America and JPMorgan’s Chase make up the top three banks in the United States. It was revealed in 2019 through a consumer survey by Cornerstone Advisors that 44% of Americans between the ages of 21-37 years prefer banking with any of Wells Fargo, Citigroup, and the Bank of America. The Bank of America we’re going toe to toe with Wells Fargo until the customer abuse scandals blew over. Now Wells Fargo is closer to slipping to fourth than climbing to second place.
JPMorgan Chase is the largest bank in America and globally ranked the sixth largest financial institution. It is considered both an universal bank and a custodian bank. Services offered by JPMorgan Chase include private banking, investment banking, asset management, private wealth management, and treasury services. Its subsidiaries include Chase Bank, J.P Morgan & Company and One Equity Partners. After a merger between J.P Morgan and Chase Manhattan in 2000, JPMorgan Chase was established. It is headquartered in New York City, New York. JP Morgan has 256,981 employees and $142.42 billion in revenue as of 2019.
By assets and revenues, JPMorgan Chase is America’s largest bank. It has a more diversified business model and revenue streams, that is one of the factors that has given it an edge over its competitors. While Wells Fargo made 72% of its revenue from consumer and commercial banking, JPMorgan Chase made only 51% from consumer and commercial banking and another 25% from sales and trading. The gap between Wells Fargo and JPMorgan will keep widening because of Wells Fargo’s recent troubles.
Marcus Goldman and Samuel Sachs founded Goldman Sachs in 1869. With regards to investment banking, investment management, and securities trading, it is one of the leading financial institutions. Goldman Sachs is headquartered in New York City, New York. Goldman Sachs operates four subsidiary brands which includes Ayco, Goldman Sachs Capital Partners, and Marcus by Goldman Sachs. Goldman Sachs serves government and other financial institutions besides individual customers and corporations. In 2019, its revenue was $36.54 million and had about 38,300 employees. It won the best international bank in Hong Kong, India, and China in 2019 by the Finance Asia Country Awards.
Goldman Sachs was regarded as one of America’s giants in the financial industry. The 2008 financial crisis brought about the bank’s downfall. It is now playing catch ups with Wells Fargo. It is speculated by sources within investment banking that it is looking to acquire a major commercial bank to boost its standing in the financial industry.
In 1792, State Street Corporation was founded as the Union Bank in Massachusetts. In 1865 _ it received a national charter and was renamed the National Union Bank of Boston. The bank merged with State Street Deposit and Trust Co (founded in 1891) in 1925 and rebranded to State Street Corporation. It is the second oldest bank in America. It is ranked the 15th largest bank in terms of assets but ranked the second-largest custodian bank globally. The bank has 39,103 employees as of 2019 and a revenue turnover of $13.13 billion. State Street has its headquarters in Boston, Massachusetts.
Its revenue is still a fraction when compared to the leaders in the financial industry such as Citigroup, Wells Fargo despite being one of the largest investment and custodian banks in the world. Wells Fargo in 2019 downgraded State Street from “outperform” to “market perform” in its stock ratings. Goldman Sachs also downgraded it from “buy” to “neutral”.
After Banque Nationale de Paris (BNP) merged with Paribas in 2000, BNP Paribas was established. With headquarters in Paris, France, the bank had its presence in 72 countries around the world. In the Eurozone, it is the largest bank at the moment and the 8th largest bank in the world by assets. Retail banking and investment banking services for both corporate and institutional clients are offered by BNP Paribas. In 2019, the bank posted $50.6 billion in revenues and has 198,816 employees.
BNP Paribas was fined at least $8 billion by the US Federal Government for violating US regulations and evading sanctions in 2014. That fine is the largest fine served on a bank. It has been able to maintain its place among the world’s largest banks despite the setback and has continued to grow steadily. While its revenues can not still match up to Wells Fargo’s, the latter’s trouble will play into BNP Paribas advantage and help close the gap.
Wells Fargo competitors are: Citigroup, Bank of America, JPMorgan Chase, Goldman Sachs, State Street Corporation, BNP Paribas and a host of others. Wells Fargo’s biggest competitor is JPMorgan Chase.