Marketing Analysis for Wells Fargo
Wells Fargo is the fourth largest bank in the United States by assets and the largest bank by market cap. Headquartered in San Francisco, CA, it is a diversified financial services company with worldwide presence. Presently, Wells Fargo is the only AAA-rated bank in the U.S. Based on long-term foreign currency ratings from S & P and Fitch Ratings and the long-term bank deposit ratings from Moody’s Investors Service, Wells Fargo was named “The World’s Safest U.S. Bank” for the year 2007. In 1998, Wells Fargo merged with Norwest Corporation. Because of the nationally recognized Wells Fargo name and trademark, the Wells Fargo name was kept to capitalize on its long history. Now headquartered in San Francisco, CA, Wells Fargo has over 5900 retail branches, more than 3300 banking branches, 160,000+ employees and over 23 million customers. On October 3, 2008, Wells Fargo announced it would be acquiring Wachovia. Even though there had been negotiation between Wachovia and Citicorp, Wachovia preferred the Wells Fargo acquisition to keep the brokerage and banking businesses together. They felt is would benefit their shareholders and did not require Federal assistance as the Citicorp acquisition would have required. Citicorp believed they had an exclusivity agreement with Wachovia and demanded discussions between Wachovia and Wells Fargo be discontinued. However, on October 9, 2008, Wells Fargo purchased all of Wachovia when Citicorp announced they would discontinue their attempt to block the merger. The merger is set to be complete by the end of December 2008.
Product or Service to be Presented
Fixed Rate Mortgages: Fixed Rate Mortgages (FRM), as the name implies, are mortgages that have a fixed interest rate for the term of the mortgage. Therefore, the interest rate will remain the same throughout the life of the mortgage, even if there is a fluctuation of interest rate in the mortgage market. The advantage of the FRM is that you know exactly how much your mortgage payment will be and makes budgeting much easier. This loan is the most popular of home financing loans. Adjustable Rate Mortgages: Adjustable Rate Mortgages are mortgages where the interest rate will fluctuate over the life of the mortgage. Most ARMs begin with a fixed low interest rate for a short period of time and then they become adjustable. This is very helpful for individuals who may not have a large amount of assets when purchasing the home. However, they anticipate making more money when the rates become adjustable. This is also a good loan if you only plan on staying in your home for a short period of time, say 5 – 6 years. You can acquire an ARM with a low fixed interest rate for the first 3 years and sell your home when the rates become adjustable. These loans normally have a cap in the amount of interest the loan can be adjusted during an adjustment period. These rates are dependent upon the prime rate. On an ARM, the rate and payment will remain the same for the first three years. After the initial three years, the rate is subject to change every six months. The first adjustment in the interest ate can increase or decrease a maximum of 3% from the initial interest rate. Subsequent adjustments in the interest rate can increase or decrease a maximum of 1% from the existing interest rate. Overall, the interest rate can increase a maximum of 6% from the initial rate.
The market for home mortgages includes any individual or couple who is capable of financially qualifying for the purchase. They can be first time homeowners, current homeowners purchasing a new home, or current homeowners who presently own a home and choose to refinance their existing mortgage. Our service is marketed to individuals who are fiscally responsible. However, it is segmented by credit grade. A borrower with a high credit score...