Wells Fargo & Co. said it is hiring 25 investment bankers from hedge-fund Citadel Securities, including its head Brian Maier.

The agreement also involves the transfer of Citadel's related banking business to Wells Fargo. Further terms of the transaction weren't disclosed.

Shares were up 2.8% at $24.82 in late-morning trading. The stock through Friday's close is down 22% this year amid a broad downturn in the financial sector.

The Wall Street Journal last week had reported that hedge-fund manager Kenneth Griffin's Citadel LLC was making cuts to its New York operations, after struggling for three years to expand into investment banking and research and keep high-level executives in place. The Journal had reported that Chicago-based Citadel was in talks to sell all or part of its investment-banking business.

Maier will be based in New York and report to Wells Fargo's co-heads of investment banking Rob Engel and Jonathan Weiss.

Citadel's research and deal-advisory units are part of Citadel Securities, which also includes electronic trading and options market-making. In contrast to investment banking, the trading businesses are closely connected to Citadel's longtime strengths, including its high-frequency-trading operations and asset-management unit, where outside clients have money invested in hedge funds.

Wells Fargo, which has $1.3 trillion in assets, has made efforts to expand business banking, including its capital markets business, as its massive consumer-banking business continues to shrink.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.