Wells Fargo & Company
) is set to increase the number of fund-services clients in Asia
by almost 20% annually. This U.S. banking major currently
has 20 clients receiving its fund services in Asia, which mostly
include single-manager hedge funds, along with traditional,
private-equity and hybrid funds.
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Asia's economic growth and rising opportunities for investment
have attracted major banks such as
HSBC Holdings plc
State Street Corporation
). Notably, Asia at present contributes 15% to Wells Fargo's
global fund services revenues. The bank intends to enhance its
operations in the region, primarily Hong Kong, as the market
there is believed to have considerable growth potential.
According to Bloomberg, the Asia Pacific region issuers raised
$1.8 trillion from bond sales since the beginning of 2012,
attributable primarily to low interest rates and narrow credit
spreads. The proceeds marked an 18% rise from the amount
generated two years back.
Wells Fargo's fund services unit dates back to Cargill Inc.'s
Black River Asset Management LLC hedge-fund division. Since Jan
2007, Wells Fargo's unit has operated through a Singapore-based
office. It was only in Dec 2012 that the banking major announced
the opening of an office in Hong Kong.
With the strength of roughly 40 people, Wells Fargo's unit in
Asia provides conventional administration and outsourced
middle-and-back-office operations. The company believes that it
will have an edge by raising issuances of high-yield bonds as its
prospects depend on managing more complex funds like credit and
those that involve emerging markets.
We believe that plans of expansion in the emerging markets of
Asia will benefit Wells Fargo substantially and help offset the
sluggishly recovering domestic economy weighed upon by stringent
regulations. Investments in emerging economies will help boost
the bank's top-line growth in the near term.
Wells Fargo currently carries a Zacks Rank #2 (Buy). A better
performing bank is
), which carries a Zacks Rank #1 (Strong Buy).