E+ E Wells Fargo

1. What does the organization do? What is its major work activity?

Wells Fargo is the third largest bank in North America when comparing total assets (Dixon, 2018). Currently Wells Fargo has 1.95 trillion dollars in total assets, which is just behind Bank of America with 2.28 trillion.


Rank Bank name Total assets
1 JPMorgan Chase & Co. $2.53 trillion
2 Bank of America Corp. $2.28 trillion
3 Wells Fargo & Co. $1.95 trillion
4 Citigroup Inc. $1.84 trillion
5 Goldman Sachs Group Inc. $917 billion

Chart courtesy of Amanda Dixon and Bankrate.com

Wells Fargo’s company is broken down into three distinct areas for reporting purposes: community banking, wholesale banking, and wealth, brokerage and retirement (Compton, 2018). The community banking portion services consumers and small business and has all of the functions that fall into this category, to include, checking and savings accounts and home and student loans. The wholesale banking segment operates the large scale financials such as corporate lending, asset based lending and trade financing. The wealth, brokerage and retirement section handles all of the advisory and brokerage services for wealth management.

2.Based on your research, how does the org score on efficiency? Defend your answer.

Overall Wells Fargo scores a 2 for efficiency. This number is consumer based and priced off current market conditions for both saving and lending. To being with lending, many lower cost competitors are entering the arena to challenge the big banks. Online mortgage retailers are able to offer lower rates due to having much less overhead than the big banks. Smaller banks looking to build customer bases will also penetrate the rate market with lower rates as well in order to gain more market share.

Today’s Average Mortgage Rates from the Freddie Mac website are 4.54% for 30 year fixed and 3.99% for the 15 year fixed. The published rates for Wells Fargo are 4.739% and 4.339% for the 15 year fixed. For the saver, the rate for the Wells Fargo savings account for today is .01% annual percentage yield. Marcus by Goldman Sachs current rate is much higher than that at 1.85% APY. To add to this, there is a month charge for the Wells Fargo account for $5 monthly. For the consumer there are much more efficient alternatives in the community bank arena.

3. Based on your research, how does the org score on effectiveness? Defend your answer.

For effectiveness Wells Fargo rates at 3 trending to 4. They have a significant branding moat. They are the third largest bank and have the reserves to stay in business through recessions and downturns. Warren Buffet is a shareholder and he is the most successful individual investor of all time. They have product lines that cover all aspects of consumer and corporate banking as well as an asset management department for wealth management. In addition to their online banking options they have fixed facilities across America.

How does this translate into a mediocre score?

The FED capped the bank due to several investigations into wrongdoing and capped their assets until they could show a positive management improvement (Moise, 2018). Wells Fargo went through a scandal last year where bank employees created 3.5 million unauthorized accounts from 2009-2016 (Moise, 2018). This was attributed to an account creation goal (with pay increase) by management and a high stress work environment pushing employees for results.

4. Where would the organization like to be in the graph? Why? How do you know?

Wells Fargo would like to achieve an effective score of 5. The financials page published by market watch shows that since last year the amount of consumer loans on their balance sheet has shrank from 956 billion to 945 billion. As the largest depository bank (Compton, 2018) they will want to recapture this base of loans now that the FED has removed the restrictions on now loan development.

Wells Fargo does not worry about their current efficiency score and operate off a different model than the online banks who attempt to penetrate the market. In order to increase efficiency, the bank would have to cut services for its clients and fixed facility locations. no current evidence shows the company moving towards this type of approach.

Wells Fargo has new management and has recently received approval from the FED to continue business as usual. Their reputation damage has caused a lower than expected quarterly profit this quarter and a shrinking asset book (Kim, 2018). The number one rule for a corporation is to take care of shareholders and their current effectiveness damages shareholder wealth. Reuters analysts believe this is a blow back from the scandals that the company faced last year.

While all of this is troubling, morning star analyst Eric Compton believes that it will soon pass. He has confidence based of their strong core company and the fact that they are the leading depository bank in the United States. To quote his latest analysis from the morningstar.com page, Wells Fargo will spend 2018 in the penalty box, but it still has a strong core business.

5. Does the current positioning of the organization correspond to its vision and mission statements? Support your answer.

The following is the Wells Fargo vision:

We want to satisfy our customers’ financial needs and help them succeed financially.

This unites us around a simple premise: Customers can be better served when they have a relationship with a trusted provider that knows them well, provides reliable guidance, and can serve their full range of financial needs.

For a full mission and values brief, use the following link directly to the Wells Fargo website: https://www.wellsfargo.com/about/corporate/vision-and-values/index

Does Wells Fargo want to satisfy its Customer’ needs? They have not made a strong case over the past several years given the fraudulent account crisis they experienced. New management has gained the blessing of the FED and the business practices that incentivized account creation are gone. Time will tell if the bank operates with integrity.

Customers can be better served having a relationship with a trusted provider that knows them well. Many of their fixed facilities have the capabilities to provide this type of personalized service. One advantage to having concrete locations is that consumers can establish relationships with their bank employees when they chose to.



Compton, E. (n.d.). Morningstar | Independent Investment Research. Retrieved September 11, 2018, from https://www.morningstar.com/stocks/xnys/wfc/quote.html

Dixon, A. (2018, July 26). The 15 Largest Banks In America. Retrieved September 10, 2018, from https://www.bankrate.com/banking/americas-top-10-biggest-banks/#slide=1

Kim, T. (2018, July 02). Morgan Stanley upgrades Wells Fargo due to the bank’s ‘positive stress test results’. Retrieved September 12, 2018, from https://www.cnbc.com/2018/07/02/morgan-stanley-upgrades-wells-fargo-due-to-its-positive-stress-test.html

Moise, I. (2018, July 13). Wells Fargo’s loan book shrinks, profit misses estimates. Retrieved September 11, 2018, from https://www.reuters.com/article/us-wells-fargo-results/wells-fargos-loan-book-shrinks-profit-misses-estimates-idUSKBN1K31OA

Mortgage Rates Move Up Again. (2018, September 6). Retrieved September 11, 2018, from http://www.freddiemac.com/pmms/

Wells Fargo Personal. (n.d.). Retrieved September 10, 2018, from https://www.wellsfargo.com/

WFC Annual Balance Sheet – Wells Fargo & Co. Annual Financials. (n.d.). Retrieved September 12, 2018, from https://www.marketwatch.com/investing/stock/wfc/financials/balance-sheet


2 thoughts on “E+ E Wells Fargo

  1. You have many assumptions evident, and or you need more references to support your assertions- hard to tell since you are not citing all of your sources. You need to include citations in APA format. All future assignments in this class will be given a 0 if they are not fully cited, as it would be considered plagiarism. You have many grammatical and spelling errors. Be sure to indent large quotes in your text. You will receive 17 out of 20 possible points on this assignment.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s