Wachovia (Wachovia Corporation) is a holding company providing commercial banking, retail banking, and trust services to its customers. It offers various banking and financial services through full-service banking offices. It is one of the largest banking groups in the United States with 13 million customers, and it has operations in 21 states through 4,100 financial centers and brokerage offices across the country. The company operates primarily in the United States, but also has operations in Latin America. Wachovia was incorporated in 1967 and employed around 108,000 people as of January 1, 2007. Wachovia is a North Carolina–based company headquartered in Charlotte. Wachovia is quoted in the New York Stock Exchange with the ticker symbol of WB. It had approximately 170,000 shareholders as of January 1, 2007. After suffering record losses largely from bad mortgages in the credit crisis of 2008, Wachovia merged with Wells Fargo on December 31, 2008.
Wachovia generates its revenues through five business divisions: general banking (52 percent of its revenues in 2006), corporate and investment banking (23 percent of its revenues in 2006), capital management (20 percent of its revenues in 2006), wealth management (4 percent of its revenues in 2006), and parent division (1 percent of its revenues in 2006). Wachovia’s general bank division offers a broad range of banking products and services to individuals, small business, and commercial customers and government institutions. In addition, it serves mortgage customers and provides auto financing. Wachovia provides checking, savings, and money market accounts, home equity, residential mortgage, loans, debit and credit cards, mutual funds, and annuities to its retail customers; deposit, loan, and investment products and services to its small business customers; commercial deposit, lending, treasury management, dealer financial services, and commercial real estate products to its business banking and commercial customers.
Its corporate and investment bank division offers corporate lending, investment banking, advisory, capital raising, treasury services, and international trade finance services through its client relationship officers, product specialists, portfolio managers, and fixed-income and equity sales, trading and research professionals. The investment banking and the global markets businesses operate under the Wachovia Securities brand. The capital management division provides a range of proprietary and nonproprietary investment and retirement products and services to retail and institutional clients. The division includes Wachovia Securities, one of the three largest retail brokerage firms in United States. It also includes Evergreen Investments, a large and diversified company that provides asset management services.
The wealth management division offers private banking, personal trust, investment advisory services, financial planning, and insurance brokerage services to clients with $2 million or more in investable assets. The services are offered through relationship managers and specialty advisers, who provide sophisticated family wealth products to ultra-high-net-worth families. The parent division is responsible for all asset and liability management functions, such as managing the securities portfolio for liquidity and interest rate risk. This division also includes goodwill and other intangible assets, and related funding costs, certain revenues and expenses that are not allocated to the business segments.
Wachovia National Bank was founded in 1879 in Winston, North Carolina. Later, Wachovia Loan and Trust Company was established in 1893. The two companies merged in 1911 and formed Wachovia Bank and Trust Company, which later evolved into Wachovia Corporation. In 2001 Wachovia merged with First Union Bank, a large diversified financial services company chartered in 1908, which grew through mergers with more than 80 banks and other companies over many years. As a result of the merger, First Union changed its name to Wachovia Corporation. Following the merger, Wachovia continued to grow through various acquisitions.
The executive team of Wachovia, before the merger with Wells Fargo on December 31, 2008, included Lanty L. Smith (interim chief executive officer), Benjamin P. Jenkins (interim chief operating officer, vicechairman), and Thomas J. Wurtz (chief financial officer). The board of directors included John D. Baker, Peter C. Browning, John T. Casteen, Jerry Gitt, William H. Goodwin, Maryellen C. Herringer, Robert A. Ingram, Donald M. James, Mackey J. McDonald, Joseph Neubauer, Timothy D. Proctor, Ernest S. Rady, Van L. Richey, Ruth G. Shaw, and Dona Davis Young.
There are many reasons for the success of Wachovia. First of all, it achieved strong market position in the competitive U.S. banking market. Wachovia’s leading market position in various segments of the U.S. banking sector reflects its strong foothold and puts it at a competitive advantage against other players in the market. Another reason may be its broad service distribution network. By reaching masses of customers, Wachovia is able to cross-sell its products and services, which increases its revenues with less operational costs.
- Board of Governors of the Federal Reserve System, Statement by the Board of Governors of the Federal Reserve System Regarding the Application and Notices by Wells Fargo & Company to Acquire Wachovia Corporation and Wachovia’s Subsidiary Banks and Nonbanking Companies (Federal Reserve System, 2008);
- S. Securities and Exchange Commission, www.sec.gov (cited March 2009);
- Wachovia, www.wachovia.com (cited March 2009);
- Wachovia Corporation, “Wachovia Completes Research of Predecessor Companies: Apologizes for Historical Ties to Slavery and Plans to Work with Community Partners to Increase Education and Awareness of African-American History” (Wachovia, 2005);
- Wachovia Corporation and History Factory, Wachovia Corporation and Its Predecessor Institutions: Findings Report (History Factory, 2005).
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