Wells Fargo will downsize Wachovia's investment bank
By Rick Rothacker and Christina Rexrode | Charlotte Observer
ROCKINGHAM — Wells Fargo & Co. executives signaled Wednesday that the bank will downsize Wachovia Corp.'s corporate and investment bank after the companies' planned merger later this year.
In a conference call with analysts, Wells Fargo chief financial officer Howard Atkins said there were a “number of businesses in the mix we will look to downsize to a certain extent,” naming the “higher risk” and “more transactional” aspects of investment banking. The San Francisco-based bank also plans to shed Charlotte-based Wachovia's troubled $118 billion Pick-A-Payment mortgage portfolio.
Wells last month agreed to buy faltering Wachovia in a deal initially valued at $15.1 billion. The merger is expected to close Dec. 31 after a Wachovia shareholder meeting earlier that month, Wells said.
Wachovia's corporate and investment bank employs about 5,700 worldwide and is a source of high-paying jobs in Charlotte, where the business is based. Since the credit crunch began last year, the unit has suffered billions in losses on mortgage-related investments and has cut hundreds of jobs as business has dried up.
Wells held the unscheduled conference call after announcing plans to raise $10 billion in capital through a public stock offering. It had previously said it would raise up to $20 billion as part of the Wachovia deal, but it has since received an injection of $25 billion as part of a federal government program.
Read the complete story at charlotteobserver.com
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