The acquisition by Wells Fargo may have been a boon for Wachovia shareholders, but it looks like it’s bad news for Wachovia’s investment bankers. Basically, every analyst who has been asked is predicting that Wells Fargo s likely to eliminate or downsize the bank’s investment banking unit.
Bloomberg cites an Oct. 10 note by Standard & Poor’s that said that the investment banking unit likely to be “significantly downsized after the acquisition.”
“They have enough to manage without the added complexity of an investment banking operation,” Sean Eganof Egan-Jones told Bloomberg. “Those people aren’t making much money in investment banking.”
The investment banking unit employs 6,000 people. It “isn’t a good fit with the rest of the San Francisco bank,” George White writes at the Deal.
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