The last company visit of the Business Week 2015 was at Wells Fargo. We were explained that there are two main ways to measure the success of a bank: its assets or its market capitalization. As Europeans, only a few of us have heard of Wells Fargo before. However, Wells Fargo is the largest bank in the world measured by market capitalization. But there are only a few Wells branches in Europe: they are mostly settled in the US and in Pacific Asia.
Our speaker was Tony Liebo, the director of global banking at Wells Fargo in Seattle. It has been 26 years since he joined the company, and he never left! We were lucky to have such a passionate interlocutor. He explained us that what makes his job fascinating are the two interrelated but also different phases of his relationship with his clients. The first step is asking the right questions, listening to the clients’ goals and observing. The second one is to sell his recommendations and services to the clients. So it joins both consulting and sale. Mr. Liebo works with wide portfolio of companies: it gives him the opportunity to discover a large rank of different industries and to make each experience a new one.
As students with an economic background, we were very curious to learn more about the situation of Wells Fargo during the crisis of 2008. As we all know, recession was led by bad loans: during this period bankers relaxed their standards to sell more residential loans. They started to give residential loans to families who didn’t have the economic situation to support it. Before the take-off of the mortgage market, Wells Fargo had an important market share of the residential loans. During this “crazy” period, Wells Fargo kept its standards when selling loans. As a consequence, the bank lost a huge part of this market share in residential loans. However, the crisis had no consequences on their business. On the opposite, numerous banks went down because of this downturn: he gave us the example of the bank Wachovia. Thanks to its good financial situation during the crisis, Wells Fargo has been able to buy Wachovia and, as a consequence skyrocketed its market share in residential loans after the crisis. It was very stunning for us to hear a banker saying “Last five years were incredibly good for us”. The strategy they applied during the crisis allowed them to have today 270 000 employees and to overcome the competition, and so become the first bank in capitalization.
So how does the recruitment process go in such a big financial group? He told us that a bachelor degree in accounting or finance is obviously preferred but not mandatory. You are often first hired in the retail side of the bank. By this time, you follow a formal training program by taking classes (this is called the “management training program”) and also an informal one by learning from your colleagues. After three years, you can access the commercial side of banking by following an intensive training of 5 months in the headquarters office in San Francisco. Thanks to this training, you can become a relationship manager in the US or oversea. This type of training makes you valuable for Wells Fargo but also for its competitors as ICBC, JPMorgan or HSBC. In fact, five years after the end of these training sessions, half of Wells Fargo’s manager have left the group.
As a relation to our entrepreneurship program, he warned us that banks are not lending money to new ideas: as they don’t have access to ownership, they can’t take the risk of losing money. This visit was very different from the other visits as it was the only bank we have seen, but it was still rewarding.
Written by Claire SOURDEAU, Ségolène CHEVALLIER & Sophie GUICHEMAN