Wells Fargo’s investment bank unit is in hiring mode, reportedly gearing up to hire hundreds of new employees — including around twenty managing directors.
The Financial Times, citing a person with direct knowledge of the bank’s plan, reported the securities unit will continue to expand as it puts more efforts on the equity capital markets and mergers and acquisition businesses where Wells Fargo has played a smaller role in the past. The unit has around 5,000 employees and in 2018 will hire a couple of hundred across the unit, with many being brought on to replace those that aren’t performing well. Of the hires, around twenty will be for managing directors who can bring on clients or provide more capabilities to the national bank, reported the Financial Times. According to the paper, so far Wells Fargo’s focus on moving up in the investment banking industry has been uneven — it hit seventh place in the U.S. based on investment banking revenue in 2015 only to fall to ninth place in 2017. Wells Fargo has high aspirations to move up the rankings and thinks it will hit the top ten in U.S. M&A and equity capital markets, noted the report.
Before Wells Fargo’s fake account scandal, which has hurt its reputation and cost it ton of money to settle lawsuits and cover fines, it had been expanding on Wall Street for around a decade, sitting on the third largest balance sheet among U.S. banks. Earlier in 2018, it had said it was aligning the corporate and investment bank units at the company and would reduce the headcount as result. It was prompted by the Federal Reserve’s rare action to prevent the bank from growing beyond $2 trillion without the nod from regulators. In late April in a “coordinated action” with the Office of the Comptroller of the Currency (OCC), the Bureau of Consumer Financial Protection Bureau (CFPB) announced a settlement with Wells Fargo in which it was assessed a $1 billion penalty but the bureau credited the $500 million penalties collected by the OCC against the fine, the bureau said in a statement.