Wells Fargo & Co. plans to open two new branches and reopen a third this year, all in South County, as the bank shifts to a branch-oriented growth strategy.
“We are trying to reposition our network where the growth is and where we don’t have coverage,” said Kim Young, a senior vice president and market president with Wells Fargo. The bank plans to open a new branch in Ladera Ranch, a masterplanned community in South County. The other new branch will be in the Ocean View Plaza in San Clemente.
Wells Fargo also is set to reopen a branch that it closed when it acquired Salt Lake City-based First Security Corp. in October and sought to cut redundancy in the two banks’ branch systems. In December, Wells also reopened a branch in Irvine.
Wells Fargo executives have thought about making acquisitions in the Southern California market.
“It is another big part of the growth strategy and it would not necessarily have to be a big bank. It doesn’t make sense to build a de novo branch in an established market,” Young said.
The new branches come at a time when Wells Fargo is changing its philosophy about where to put branches.
“We are trying to get away from just the grocery-store branch,” Young said. The bank previously put branches in market areas for geographic coverage.
Young said the new strategy is to have access points surrounding a consumer’s branch location.
“We want to have a branch and in-stores around them, like a hub and spokes,” Young said.
The new operating strategy comes after Wells Fargo acquired Norwest Corp. and adopted some of that firm’s best practices. It could lead to more Wells Fargo branches in the future.
“When we merged with Norwest, we had a different focus. Wells Fargo was focused on expenses (to grow earnings) and Norwest was focused on driving earnings by increasing revenue,” Young said. Wells Fargo has become more aggressive and in a few city markets, like Santa Ana and Newport Beach, the bank has wrested market share from mainstay Bank of America Corp., Young said.
Wells also is taking a new tack in its local markets.
“We are focused on local market strategies. We put all our managers through training to create market plans for specific regions. It puts the management in the local stores’ hands,” Young said.
Other banks like Bank of America have made similar moves to give more autonomy to regional managers. With more consolidation in the financial services industry, local managers were having less control over operations and many consumers were heading to the community banks to get service they wanted.
“The bigger you get, the less effective it becomes,” Young said.
Large banks also have had to adjust as community banks became more technologically advanced and were offering the same services as the larger banks. n
