Wells Fargo & Co.'s private banking business plans to use its newly established office in New York City as a beachhead for expansion in the Northeast.
John Duchala, the regional manager in charge of the new office, said that the San Francisco company wants to develop and expand its private banking operation in the region over the next few years.
This development might include opening offices in cities "along the I-95 corridor" including Boston, Philadelphia, Washington, and Baltimore, he said in an interview Monday. Wells might also consider opening offices in New Jersey and Westchester County, N.Y.
"Right now our focus at Wells Fargo is on developing private banking clients in Manhattan, but we will look at specific opportunities in other markets where the right opportunities arise," Mr. Duchala said. "When we look ahead to 2009 or 2010, if the right opportunity arises in certain cities, we will consider opening an office."
The expansion into the Northeast is really a continuation of a strategy that began a year ago when Wells opened a private banking office in Chicago, he said. Since then it has also opened offices in Oklahoma City and St. Louis.
Mr. Duchala was the Northeast regional director for JPMorgan Private Client Services before Wells Fargo hired him in June. He said he is confident that it can develop its business in the Northeast by targeting individuals with $1 million to $50 million of investable assets.
"We want to target specific niche segments of the market, including business owners, corporate executives, and professionals, including attorneys, CPAs, and physicians," he said.
Other banking companies, including SunTrust Banks Inc. of Atlanta and UnionBanCal Corp. of San Francisco (which is mostly owned by Mitsubishi UFJ Financial Group Inc.), are targeting specific wealthy niches.
For example, SunTrust has introduced units over the past five years that target doctors and lawyers, professional athletes, country music performers, and race car drivers. The units offer private banking, lending, and investment management services to each group.
Mr. Duchala said that he is confident that by targeting niche markets in the Northeast, Wells can add more high-net-worth customers to its private bank.
Some of its other businesses have already opened offices in the Northeast, he said, and the private banking business will begin by cross-selling to these customers.
On Monday, Wells Fargo announced the expansion of its commercial banking business in the New York area when it opened offices in Long Island and Westchester County. In the past few years it has opened regional commercial banking offices in Massachusetts, New Jersey, New York, Pennsylvania, and Florida.
"People in this region know the Wells Fargo brand at this point, but some of them just don't know that we also offer private banking services," Mr. Duchala said. "We want high-net-worth customers to understand we are open for business, and that we will lend to the right clients."
Wells is interested in expanding into other regions, including the Southeast, he said, but for now it plans to focus on expanding in the Northeast.
Mr. Duchala said that he has already hired 10 financial advisers for the New York office and expects to have a total of 15 financial advisers by the end of the year.
From there, "the market will drive the number of advisers that we hire," he said. "We want to carefully balance so that we can hire the right number of advisers to service the clients that we are able to attract."
