Wells Fargo 2008 Annual Report Download - page 8


Management and Retirement Services, Commercial Banking,
Investment Banking, Mortgage, Card Services, and Technology
and Operations. St. Louis is headquarters for Wachovia
Securities, retail broker. Boston is headquarters for Wachovia’s
Evergreen Investments, asset management.
Our 2008 performance
In addition to the achievements I mentioned at the beginning,
we also built the foundation for future growth of our combined
company with these achievements in 2008:
• Our revenue grew 6 percent, and our expenses declined
one percent — the best such revenue/expense ratio among
our large peers, and the one we consider the best long-term
measure of a company’s e ciency.
• Our return on equity (after-tax profi t for every shareholder
dollar) was 4.79 cents for every dollar of our shareholders’
equity, best among our large peers.
• To help fi nance the Wachovia acquisition, we issued
422.7 million shares of common stock valued at $12.5 billion
at year-end. Excluding initial public o erings, this was the
largest single issue of common stock in U.S. history. The
enthusiastic response to this o ering in a very di cult
market again showed broad investor confi dence in our
long-term growth potential, time-tested vision and
diversifi ed business model.
• Our average Retail Banking household had a record
5.73 products with us (5.5 in 2007; 3.8 in 2001), and one
of every four has eight or more products with us.
• We added 6.2 percent net new checking accounts — a core
product that if our customers have with us makes them
much more inclined to come to us for their next fi nancial
services product.
• More than half our new Business Banking checking
customers bought a package of products from us when they
opened their accounts — such as a business debit card, credit
card, or a business loan or line of credit.
• Our average Wholesale Banking customer had a record
6.4 products per relationship with us; a record 7.8 products
per Commercial Banking customer relationship.
• Average core deposits from our Wealth Management
customers rose $7 billion, up 40 percent; Private Banking
average core deposits rose 38 percent.
• We originated $230 billion in mortgages, and our
owned-mortgage servicing portfolio was $2.1 trillion
(including Wachovia), up 39 percent from last year.
• Our most-used channel, wellsfargo.com, had a blockbuster
year — product “solutions” sold up 29 percent, total active
online customers surpassed 11 million, up 15 percent, active
consumer Bill Pay customers up 16 percent to two million,
and we introduced the vSafeSM personal online safe for
protecting and storing important documents.
• Besides Wachovia, we acquired the banking operations
of United Bancorporation of Wyoming, Flatiron Credit
Company (insurance premium fi nance), Farmers State
Bank (Morgan, Colorado), Century Bancshares (Dallas-Fort
Worth; Texarkana, Texas and Arkansas) and EMAR Group
(commercial insurance).
• Our team members as a whole are happier in their work
than ever before. In Community Banking, home to about
one of every three of them, the ratio of engaged to actively
disengaged team members was 8.7 to 1 (2.5 to 1 fi ve years
ago) versus a national average of 1.5 to 1. Our most senior
bankers — market presidents, district managers and
regional presidents — are more engaged than about nine
of every 10 work groups Gallup surveys.
• The $25 billion investment by the U.S. Treasury in
Wells Fargo preferred stock in fourth quarter 2008 gives our
company more resources and greater confi dence to make
more loans to credit-worthy customers. Our new lending
in the fourth quarter 2008 alone was almost three times
the government investment. In February 2009 we paid a
quarterly dividend of $371.5 million to the U.S. Treasury
on its Wells Fargo investment.
Lending discipline
We’ve said it for years and we’ll say it again because it’s
never been more important: Our #1 fi nancial goal is to have a
conservative fi nancial structure as measured by asset quality,
capital levels, diversity of revenue sources and dispersing risk
by geography, loan size and industry.
True to that and unlike many of our competitors we actually
built capital and shrunk our balance sheet in 2005 and 2006,
well before credit markets began to contract in 2008. We
understood our customers’ fi nancial needs. As a result, our
company is one of the world’s strongest fi nancial institutions.
Even as credit markets contracted in 2008, we still led the
“ We’re not satisfi ed with just being #1 in deposit market share.
We want to be known as the best in every product in every market
in which we do business, in retail banking, business banking,
investments and mortgage — and be the fi rst provider our
customers think of when they need their next fi nancial product.”