They are small part of wells. They don’t seem to offer anything special in the market. Even if it grow after asset cap is lifted will not make much difference to the bank
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I don’t disagree with the 2 last posts, but it still begs the question, would WF be better off minus 1/3 of its net income.
There are plenty of problems with WF and CIB where both could be better, but finding it hard to believe that people honestly would potentially say let’s just give up on CIB because we aren’t as good as JPM. Is another WF business going to use that capital more efficiently than CIB? We are all inefficient here because the infrastructure is terrible.
@1khj+1sFvG61a
CIB can't grow much due to the asset cap. Schart can only exit so many markets to free "cap" so CIB can grow. The early comment that they're one of the most revenue efficient Groups is spot on and we should be putting resources behind that area.
The big concern should be that half CIB revenues come from CRE....if that market tanks, CIB is f'd with an elephantine phallus.
The problem is they are not nearly as profitable as other peers. They don’t generate enough fee revenues requiring less or no capital. The whole business is still highly reliant on heavy capital usage, simply because the management has failed to grow any meaningful investment banking business. At most, we have an okay DCM business but that’s pretty much it.
@1bwj+1sFvG61a Misleading response. What about the capital they require to sustain and maintain their business? This is even more problematic in an asset cap regime. That’s why we have these measures, like ROE and stuff. Also, many of the products this LOB offers have a high expense ratio, which takes into account of staff expense. It may look efficient when just looking at the employee numbers but it’s not as simple as that. There is a reason why there has been many layoffs in this LOB as well.
Is WF CIB small and lacking in a lot of areas compared to peers? Definitely.
Is it insignificant to WF? I don’t think so, CIB had just over 1/3 of the net income for the company in 2023 with about 3% of the employees in the company.
If you rank the business groups by net income from 1 to 4 it’s consumer banking and lending, CIB, CB, WIM.
If you rank them by efficiency ratio it’s CIB, CB, big gap, CB&L, big gap, WIM.
If you want to slam one of the four businesses, it’s WIM. They spend 82 cents to make every dollar and only represent 10% of the company’s net income.
Nothing worthy talking about PERIOD.
This is the way.
There’s nothing worth talking about at WF.
There is nothing worth talking about CIB.