In an effort to expand its business and augment its top line,
Wells Fargo & Company
) is adding jobs both in the U.S. as well as in Asia. Its brokerage
unit, Wells Fargo Advisors, is growing its St. Louis office and
intends to create 400 jobs in the city, according to a report by
the Associated Press.
As per the plan, Wells Fargo will expend about $33 million for
refurbishing its downtown St. Louis headquarters. However, the
company will receive support from the state. It will get an
economic incentive package in the form of $12.6 million in tax
credits. Moreover, $540,000 is also being offered by the state in
New Jobs Training Incentives.
The 400 jobs will be added in a span of three years. Besides
adding jobs, these 400 positions will also result form employees
consolidation from other cities including Minneapolis.
Notably, in the past decade-and-a-half, consolidating activities
on part of companies resulted in several headquarters moving out of
St. Louis. However, the region is still an important place in the
financial firms sector.
Increasing Workforce in Asia
Besides boosting its workforce in the U.S., Wells Fargo also
intends to augment its staff strength in Asia, according to
Bloomberg news. In the next three years, the company plans to
augment its workforce by at least 10%. This comes amidst cut down
of jobs by a number of its rivals such as
Royal Bank of Scotland Group Plc.
While its rivals are either slashing growth or trimming
workforce in the region to lower their cost base, Wells Fargo
intends to add over 400 jobs for its 4,200 people squad in the
region. This would also include about 20 hires in Hong Kong by the
end of 2012 and around 15 to 20 in China in the next four
Wells Fargo's rivals had significant equity and debt capital
markets businesses in the region that are facing slowdowns, and
therefore these companies are slashing their jobs. However,
compared to its rivals, Wells Fargo is more into the traditional
banking business, which is enabling it to more easily stay
Given its diverse geographic and business mix, Wells Fargo
stands to benefit from consistent earnings growth. It has achieved
the tenth consecutive quarter of growth in earnings by reporting
EPS of 82 cents per share in the second quarter of 2012,
representing 17% year-over-year growth based on improvements in
mortgage banking as well as credit quality.
We believe that workforce expansion in select markets will
augment its business and position it better compared to peers.
Moreover, strategic acquisitions will help expand the company's
business and improve its profitability. It is also capitalizing on
the deleveraging activities of the European banks.
Notably, in recent times, in an effort to boost its subscription
finance business, Wells Fargo has agreed to buy WestLB's $6 billion
subscription finance portfolio. Such moves augur well and position
the company for better growth in the years ahead.
Wells Fargo currently retains a Zacks #3 Rank, which translates
into a short-term Buy rating. Considering the fundamentals, we also
maintain a Neutral recommendation on the stock.
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