(Bloomberg News) Wells Fargo & Co., the U.S. lender with the largest branch network, is aiming to build its private bank in New York by attracting affluent customers neglected by some other competitors.
Wells Fargo may increase the number of private bankers to 77 from 67 in the New York area to manage money for clients with at least $5 million in investable assets, according to Jennifer Lee, a regional managing director. More established rivals like Citigroup Inc., based in New York, target private-banking services to most clients with more than $25 million in assets, according to Robert Testa, senior analyst at Boston-based Cerulli Associates.
"Since the credit crisis, high-net-worth clients have come to value the services of a private bank more," Testa said. "Wells Fargo will definitely compete with the JPMorgans and Citigroups, but since those guys have such higher minimums, they will be serving this other population."
Chief Executive Officer John Stumpf, 57, who called the wealth, brokerage and retirement business "sub-optimized" in December, is seeking assets in a region where Wells Fargo had little or no presence before its 2008 purchase of Wachovia Corp. and recent rebranding of those offices. High-net-worth individuals have $6.2 trillion in investable assets, the San Francisco-based lender estimated in a May 2010 presentation.
Mark Costiglio, a spokesman for Citigroup, confirmed the bank's targeting of clients with $25 million. Doug Morris, a spokesman for New York-based JPMorgan Chase & Co., said the lender has historically sought ultra-high-net-worth clients but in recent years has offered private-banking services for a wider range of customers.
"When you are a national firm as we are now, having a meaningful presence in New York City is incredibly important," Lee said in a phone interview. "If you overlay opportunity with relative newness to the market, it's incredibly important for us to have the right team here and build the brand."
Wells Fargo recently hired Thomas Belden from Bank of America Corp., Susan Bennett from Bank of New York Mellon Corp., and Belkis Knudsvig from Barclays Plc, for the New York region, Vince Scanlon, a Wells Fargo spokesman, said in an e-mailed statement.
Wells Fargo's goal is to increase the number of wealth- management clients by 6 percent each year, Jay Welker, who heads the unit, said in the May 2010 presentation. The private bank managed $210 billion in client assets at the end of March, Scanlon said in a separate e-mail.