Wells Fargo & Co. chief economist Sung Won Sohn says he is cautioning loan officers in San Francisco about a slackening of the area's economy.

In his self-described role as "internal consultant" for the newly created, $196 billion-asset Wells Fargo, Mr. Sohn is voicing concern about a slowdown in Northern California, particularly in and around Wells Fargo's headquarters city.

"The Bay Area has begun to slow already and will be slowing down more rapidly than the rest of this state and the rest of the country," said Mr. Sohn, a veteran of the former Norwest Corp., which acquired Wells Fargo this year.

Despite its strong growth in recent months, the San Francisco area will succumb in 1999 to pressures from the Asian economic slump, he predicted in an interview last week.

The region draws 11% of its income from exports, and half of those go to Asia. But the turmoil across the Pacific Ocean has reduced demand for high- tech goods, he said.

As a result, Mr. Sohn warned, fee income is likely to decrease. The message to Wells Fargo lenders is to tighten underwriting standards. "When economic growth slows, the loans you put on the books may have higher risk," he said. "That means being a little more careful about asset quality and making sure you take contingencies into account, so that you get paid when these contingencies occur."

One piece of good news in his scenario is that the area's economy is in for a soft landing. "In the long term we're optimistic," Mr. Sohn said. "I would not want the Bay Area to grow 4% or 5% a year. That wouldn't be sustainable and would be a sure recipe for a bust."

Despite his concern about the near term, Mr. Sohn said the merger with Wells Fargo brought Norwest into markets it had deemed desirable for some time.

Nearly a decade ago, Norwest executives noticed that the company's Upper Midwest markets were not growing especially fast, and "we identified the western half of the United States as a growth market we wanted to expand in," Mr. Sohn said.

Norwest moved into Texas, Colorado, New Mexico, and Nevada during the 1990s, but several attempts to break into the West Coast states failed. Finally, however, the Wells Fargo deal came along.

When the transaction was completed Nov. 2, the company had nearly 3,000 branches in 21 states, including a sizable base in California. The new Wells Fargo is a top bank in nine of the 10 fastest-growing states.

R. Jay Tejera, an analyst at Dain Rauscher in Minneapolis, said western banking markets, where population growth rates are often double the national average, are extremely attractive to Norwest. But the company's wish to diversify was also behind the merger.

"The diversification aspect here is hugely important," Mr. Tejera said. "They are now one of the most diversified bank holding companies, which helps them maintain consistency in earnings."

Mr. Sohn agreed that Wells Fargo and Norwest are "an excellent fit, with very little duplication and a lot of synergies."

Asian problems may call for caution, but Mr. Sohn predicted they will not last long. "The stage is being set now for an Asian recovery, and the primary beneficiary will be the West Coast," Mr. Sohn said. "We're glad to be here."

His recent survey of West Coast economic conditions was motivated partly by personal reasons: He was looking for a house. Though Norwest's headquarters have shifted to San Francisco, Mr. Sohn said a move is out of the question for him because home prices in and around the City by the Bay are so high.

"After this experience, I think I'll be staying in Minneapolis," he said.

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