November 5, 2014 / 5:23 PM / in 3 years

Wells Fargo sticks to what it knows in overseas push

A woman walks past teller machines at a Wells Fargo bank in San Francisco, California October 10, 2013. REUTERS/Robert Galbraith

LONDON (Reuters) - Wells Fargo & Co (WFC.N), the world’s biggest bank by stock market value, remains on the lookout to buy loan portfolios in Europe but is in no hurry to snap up an ailing bank to speed up its international growth, a senior executive told Reuters.

San Francisco-based Wells Fargo emerged from the financial crisis of 2008-2009 better placed than many rivals and is often touted as a possible buyer of banks around the world.

“A lot of banks have issues that we don’t have, so we’ll focus on what we’re good at,” said Tim Sloan, head of wholesale banking. “We’re not that interested in acquiring new businesses that we’re not familiar with.”

In the last three years Wells Fargo has bought a 4 billion pound ($6.4 billion) portfolio of UK commercial real estate loans from Commerzbank AG (CBKG.DE), paid 690 million euros ($862 million) to buy asset-backed lender Burdale and picked up a North American oil business from BNP Paribas SA (BNPP.PA), which also gave it an opening into the North Sea oil sector.

“The theme of all the acquisitions is they were good customers and in businesses we were very comfortable with,” Sloan said in an interview on Wednesday. “In terms of using our excess capital, those are the types of opportunities that make a lot of sense to us.”

The bank has a long history of acquisitions, including the purchase of U.S. bank Wachovia in 2008. Its shares have almost doubled since the start of 2012, potentially making it easier to use its own stock for deals.

INTERNATIONAL GROWTH

“Wells Fargo has been in the acquisition business for 162 years, but 99 times out of 100 those conversations just stay as conversations,” said Sloan, who was finance director for three years until May and has previously overseen strategic planning.

Only about 5 percent of Wells Fargo’s more than $80 billion in annual revenue come from outside the United States. Sloan said he expected international revenue to grow, but said the bank had not set any targets.

He said he saw an opportunity for the bank to grow its investment banking and capital markets business outside the United States. Wells Fargo has increased in size in Europe to more than 900 staff, from 600 at the start of 2012.

Most of those jobs are in London, where it runs its wholesale banking operation which mainly serves large and medium-sized U.S. companies who are expanding overseas and European firms wanting to access the U.S. market.

It has targeted about 20 priority overseas markets, led by Britain, Canada, China and Germany, where its U.S. clients were most active.

“There are around 20 countries where it makes sense for us to provide on-the-ground support for these customers, because there’s the critical mass in these countries for our existing customers,” said Richard Yorke, head of international.

Editing by David Holmes

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