Wells Fargo & Company, a diversified financial services company, provides retail, commercial, and corporate banking services to individuals, businesses, and institutions. Its Community Banking segment offers checking, savings, market rate, and individual retirement accounts, as well as time deposits and remittances; and lines of credit, automobile floor plan lines, equity lines and loans, equipment and transportation loans, education and residential mortgage loans, and debit and credit cards. This segment also provides equipment leases, real estate and other commercial financing, small business administration financing, venture capital financing, cash management, payroll services, retirement plans, merchant payment processing, and private label financing solutions, as well as purchases retail installment contracts. Its Wholesale Banking segment offers commercial loans and lines of credit, letters of credit, asset-based lending, equipment leasing, international trade facilities, trade financing, collection, foreign exchange, treasury management, institutional fixed-income sales, commodity and equity risk management, insurance, corporate trust fiduciary and agency, and investment banking services, as well as online/electronic products. This segment also provides construction, and land acquisition and development loans; secured and unsecured lines of credit; interim financing arrangements; rehabilitation loans; affordable housing loans and letters of credit; loans for securitization; and real estate and mortgage brokerage services. The company's Wealth and Investment Management segment offers financial planning, private banking, credit, and investment management and fiduciary services, as well as retirement and trust services. It serves clients through approximately 8,600 locations and 13,000 ATMs; online and mobile banking; and offices in 42 countries. Wells Fargo & Company was founded in 1852 and is headquartered in San Francisco, California.
Business Analysis of Wells Fargo
The Banking Sector is witnessing a major shakeup, new age business models in the industry are transforming both customers and businesses. Faced with this uncertainity, companies are investing resources to transform their business. An in-depth business analysis is a valuable resource to identify and articulate the need for a business model change. At R&P Research we believe, the starting point for a business analysis is Benchmarking. Business benchmarking can be done at various levels: 1) Industry Benchmarking 2) Peer Benchmarking 3) Disruptors Benchmarking. In this report, we share the snapshot of how Wells Fargo compares against the industry on the major performance indicators. This analysis, along with peer group/disruptors benchmarking and revenue model understanding can help identify growth and cost optimization opportunities to maximize the value delivered by Wells Fargo to its stakeholders. R&P Research Industry Intelligence Platform provides historical data for last 15 years with an easy to use benchmarking interface for an in-depth comparative business analysis.
Here is the performance snapshot of Wells Fargo with an interactive chart.
- Revenue Growth: Wells Fargo reported a revenue growth of 1.1% year-on-year during 2016. Banking Industry grew at 1.5% in the same period
- COGS share of Revenues: Wells Fargo COGS share of Revenues details are not available because either company does not share the data or we do not have it
- R&D share of Revenues: Wells Fargo R&D share of Revenues details are not available because either company does not share the data or we do not have it
- SG&A share of Revenues: As a percentage of revenue, Wells Fargo spent 43.7% of its total revenues on Sales, Marketing, and General Administration (SG&A). Banking industry average SG&A spending in the same period was 53.7%
- Inventory share of Revenues: Wells Fargo Inventory share of Revenues details are not available because either company does not share the data or we do not have it
- Accounts Payable share of Revenues: Wells Fargo Accounts Payable share of Revenues details are not available because either company does not share the data or we do not have it
- Accounts Receivable share of Revenues: Wells Fargo Accounts Receivable share of Revenues details are not available because either company does not share the data or we do not have it
- PP&E share of Revenues: As a percentage of revenue, Wells Fargo invested 9.9% of its total revenues on Property, Plants, and Equipments (PP&E). Banking industry average PPE investment in the same period was 14.0%
- Intangibles share of Revenues: As a percentage of revenue, Wells Fargo invested 31.6% of its total revenues on Intangibles. Banking industry average Intangibles investment in the same period was 60.1%
- Net Margins: Wells Fargo Net Margins in the year 2016 were 26.0%. Banking industry average Net Margins in the same period were 23.5%
Sector and Industry Association of Wells Fargo
For the purpose of performance benchmarking of a company with a sector or industry average, R&P Research associates every company with one sector and one industry. An industry consists of companies with related/similar business models. A sector comprises of a group of related/similar industries. For high-level analysis purposes, related/similar sectors are grouped into sector groups.
Wells Fargo is associated with Financials Sector Group, Banking Sector, and Banking Industry.
Banking sector is comprised of a single industry: Banking. Its definition is as follows:
- Banking industry includes banks providing a broad range of financial services, including retail banking, loans and money transmissions.
Industry Ranking of Wells Fargo
With $84.5 billion revenues, Wells Fargo ranked number 2 of all the companies in the US Banking industry. There were a total of 179 public companies in the US Banking industry that had revenues greater than $50 million during 2016.
The top-10 companies in the US Banking industry by revenues during 2016 were:
- JPMorgan Chase ($95.7 billion)
- Wells Fargo ($84.5 billion)
- Bank of America ($83.7 billion)
- Citigroup ($69.9 billion)
- US Bancorp ($19.8 billion)
- PNC Financial Services Group ($15.2 billion)
- BB&T ($10.2 billion)
- SunTrust Banks ($8.2 billion)
- Fifth Third Bank ($6 billion)
- Regions Financial ($5.3 billion)
Business Model Analysis (BMA) Framework
We use the following framework to assess the business model of a company. Business Model Analysis framework can be used by organizations to articulate growth strategies and identify cost optimization opportunities. Technology and consulting companies can use this framework to identify the value drivers and pain points of their targeted customers. Entrepreneurs can use this framework to understand the language of business and identify promising business opportunities. This framework can be used by any professional aspiring to take up a leadership role to better understand the businesses challenges, articulate growth strategy, and monitor the business improvement requirements for the organization.