Magazine article American Banker

Wachovia's Commercial Lines Track Retail West: N.C. Bank to Spread Its Business Banking in California, Arizona

Magazine article American Banker

Wachovia's Commercial Lines Track Retail West: N.C. Bank to Spread Its Business Banking in California, Arizona

Article excerpt

Wachovia Corp. is introducing its way of doing commercial banking to California and neighboring states as it prepares a major branch-building program in the West that will capitalize on two California acquisitions last year.

Though the Charlotte company has said that branch-building would boost its retail presence in the West, the new offices should also help it establish a commercial banking foothold there, said Peter Jones, the head of Wachovia's banking operations in the western United States.

"Those efforts are complementary. When you start doing wholesale business, you need more branches," he said in a Jan. 4 interview. "Those businesses want you close to them for [dropping off] deposits and to allow their employees to do business."

Last summer Wachovia created two business banking teams and a wholesale team in Los Angeles to capitalize on its March purchase of Westcorp Inc. in Irvine, Mr. Jones said. And the $698 billion-asset company plans to open an Oakland office this year in connection with its integration of Golden West Financial Corp., which it bought in October.

Mr. Jones said Wachovia also is interested in sending commercial banking teams to markets such as Phoenix, where he said bankers could be in place by early next year. He declined to say how many bankers Wachovia has hired for its commercial banking initiative or how many teams would be needed in any single market.

"Golden West did not have a fleshed out wholesale business, so these are new operations that we're introducing out there," he said.

Wachovia defines its business banking clients as companies with $3 million to $25 million of annual sales; its wholesale clients typically have $25 million to $250 million.

And Wachovia is taking both categories of client into consideration as it decides when and where to build branches. It picked up 19 branches in southern California when it bought Westcorp and more than 120 in the state from Golden West, which had 285 sites in all.

Golden West provided a solid group of branches in California's suburban markets, Mr. Jones said, but Wachovia must add to these. "We are delighted in their locations, ... but they don't have as many branches as we traditionally have had" in Wachovia's markets. The company got "limited locations" in urban areas such as downtown San Francisco, he said, where it plans to open a branch this year.

Golden West used its branches largely for deposit gathering. In contrast, Wachovia needs its branches to support revenue-building activities such as commercial banking, Mr. Jones said. Having more downtown branches would help bankers court businesses that need convenient locations, he said.

Thus, aggressive branch building is planned.

Wachovia executives have said they expect to add 200 branches in California from now through early 2011. Mr. Jones estimated that about half of these could be operating by late next year. Wachovia has said it plans to open 30 branches in Southern California this year. …

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