Wells Fargo Hires HSBC Executive to Expand Trade Finance
In an effort to catch up with its competitors, Wells Fargo & Co. (WFC) hired a HSBC Holdings PLC (HBC, HSBA.LN) executive to expand its trade finance business.
The San Francisco bank said Christopher Lewis joined Monday as head of global trade services. He will lead what Wells Fargo said is an expanding team to help the bank do more business with a growing number of its commercial customers who have ties to businesses abroad.
Facilitating trade is important for midsize and large companies in need for financial services that go beyond traditional banking.
But for most of its 160-year history, Wells Fargo was a domestic bank, while competitors like Citigroup Inc. (C) and J.P. Morgan Chase & Co. (JPM) expanded abroad. Citi has what even some rivals consider virtually unmatched global operations that finance trade and moves money for large corporation across the globe.
Wells Fargo held $22 billion of foreign business loans on its books as of March 31, mainly to U.S. companies that do business abroad, according to the most recent data the bank made available in detail. That portfolio increased 144% over the last two years, while loans to middle-market businesses in the U.S. rose 25%, to $51 billion. Loans to large corporations in the U.S. declined 11%, to $24 billion.
Foreign loans made up only 3% of the bank’s $748 billion total commercial loan book. The bank is expected to report third-quarter earnings on Oct. 12.
With the acquisition of Wachovia Corp. in December 2008, Wells Fargo expanded into capital markets, offering more securities underwriting and financial advisory services to business customers. But it still doesn’t have, and has said it doesn’t want, a big banking business abroad.
Instead, it focuses on servicing U.S. companies, more of which are either importing supplies and raw materials or exporting their products, or have operations abroad, and therefore require financing beyond U.S. borders and in foreign currencies. Wells Fargo offers export financing, international letters of credit, and trade-transaction financing.
“As more of our customers do business globally, we will continue to invest in the resources and talent to best serve them,” said Richard Yorke, the head of Wells Fargo’s international group, in a press release Thursday.
Mr. Lewis spent more than 20 years at HSBC, along with Citi one of the banks with the largest global operations.
He was most recently head of trade and supply chain for HSBC in North America, but also led the London bank’s trade and supply chain operations in Greater China and managed transaction banking in the Americas, Middle East, and Asia, Wells Fargo said.
He previously worked at Barclays National Bank Limited in Johannesburg and Saudi British Bank in Saudi Arabia.