As part of its efforts to broaden its reach in international
Wells Fargo & Co.
) has expanded its wholesale banking activities throughout
Canada. The company has opened new branches and will now offer
expanded lending, treasury management, foreign exchange as well
as trade services to its customers.
This expansion in business activities in Canada follows the
receipt of regulatory nod in late September that allowed the
company to operate as a Scheduled III bank and offer commercial
and corporate banking capabilities. Earlier, the company had
select businesses in the country including Business Direct, First
Union Rail, Capital Finance and Equipment Finance.
Under the new license, Wells Fargo is scheduled to commence
operations of Commercial Banking, Global Banking, Commercial Real
Estate and the Energy group business first. Further, with the
building of its capacities in Canada, Wells Fargo contemplates
inculcating select pre-existing business activities into the new
With its head office in Toronto and the new branch offices
spanning Vancouver, Calgary and Montreal, the Wells Fargo team
comprises 75 members. In addition to benefitting the local
Canadian companies, this enhanced scale of Wells Fargo would
support the company's present U.S. customers with subsidiaries in
Canada as well as Canadian companies with business in the
Following a solid trend in earnings over the past several
quarters, Wells Fargo, which was mainly concentrated in
conducting business locally earlier, is now making strategic
efforts to increase its international presence.
In addition to extending its business in Canada, in the recent
past, Wells Fargo has capitalized on the deleveraging activities
of the European companies. Since 2011, the company has completed
a number of transactions, which include both loan portfolio
purchases as well as business unit acquisitions.
While it still lags the vast international presence of its
peers such as that of
), we believe this strategic business expansion would help
augment Wells Fargo's top line and add to its profitability.
Wells Fargo currently retains a Zacks #3 Rank, which
translates into a short-term Hold rating. Considering its
fundamentals, we also have a long-term Neutral recommendation on
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