Wells Fargo search­ing for new head of Merg­ers & Ac­qui­si­tions

The Pak Banker - - COMPANIES/BOSS -

Wells Fargo & Co, in a bid to boost its deal­mak­ing fran­chise, is hunt­ing for a new head of merg­ers and ac­qui­si­tions, ac­cord­ing to peo­ple fa­mil­iar with the mat­ter. The bank's ex­ist­ing head of merg­ers, John Laughlin, has moved to a vice chair­man role, a spokes­woman said.

Wells is look­ing for a se­nior deal­maker who can help the bank win roles on high-pro­file trans­ac­tions in which it has not his­tor­i­cally been a part, the sources said.

Wells, based in San Fran­cisco, has its East Coast head­quar­ters in Char­lotte, North Carolina, which is where Laughlin has been based and where many of its bankers sit - rather than in New York, the hub of Wall Street bank­ing.

"John Laughlin's ap­point­ment to vice chair­man rec­og­nizes the key role he played in lead­ing a five­fold in­crease in our M&A busi­ness," said Rob En­gel, head of in­vest­ment bank- ing and Fargo.

Wells has seen its stock price and re­turn on equity re­warded for fo­cus­ing on wealth man­age­ment and Main Street lend­ing, and this lat­est move re­flects a de­sire to build out its in­vest­ment bank­ing fran­chise.

Al­though the bank is con­sis­tently ranked as one of the top lenders to cor­po­rate Amer­ica, it has lagged in tra­di­tional in­vest­ment bank­ing ar­eas like fi­nan­cial ad­vi­sory and cap­i­tal mar­kets.

The bank posted about $2 bil­lion in U.S. in­vest­ment bank­ing fees in 2015, ac­cord­ing to Thom­son Reuters data, rank­ing it eighth among peers. JPMor­gan Chase & Co (JPM.N), Bank of Amer­ica Corp (BAC.N) and Gold­man Sachs Group Inc (GS.N) gen­er­ated fees nearly dou­ble that of Wells.

Wells cap­tured a 4.7 per­cent share of U.S in­vest­ment bank­ing fees, and has climbed less than 1 per­cent since 2008, when it ac­quired Wa­chovia to

cap­i­tal mar­kets

at Wells build up its bank­ing busi­ness. The bank did not crack the Top 20 for ad­vis­ing on an­nounced U.S. merg­ers and ac­qui­si­tions last year.

Ri­val bank ex­ec­u­tives are con­vinced Wells may soon make fur­ther in­roads into in­vest­ment bank­ing.

"Wells Fargo is very ac­tively, very ag­gres­sively, and very suc­cess­fully build­ing its U.S. in­vest­ment bank," JPMor­gan Chief Ex­ec­u­tive Of­fi­cer Jamie Di­mon told Bloomberg in March. Di­mon said that for Wells to re­main com­pet­i­tive, it will need to ex­pand over­seas, which may re­quire buy­ing an­other bank.

Wells, how­ever, has tended to down­play its in­vest­ment bank­ing am­bi­tions, de­scrib­ing it as one more way to serve cor­po­rate cus­tomers. The more mod­est view has won fa­vor with in­vestors, who have re­warded Wells with a higher price-to-book value than banks such as JPMor­gan. Wells trades at 1.48 times book value, com­pared with JPMor­gan's 1.03 times book.

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