After China, Wells Fargo scouts for ?permissible? stake in India

The severe financial crisis faced by the US banks hasn?t reduced their apetite for overseas opportunity, at least not of the fourth largest bank in the US by assets and second largest by market capitalisation, Wells Fargo.

The bank, which was in the news recently for taking over another US banking major, Wachovia, is eyeing the possibility of having a strategic stake in an Indian bank.

?We already hold a 20% stake in a Chinese bank. In a bid to encash on the growth of the emerging economies of the world, we may replicate the same strategy in India by buying a permissible stake in an Indian bank too,? said Steve Ellis, executive vice-president, group head, Wells Fargo.

However, Ellis did not divulge more information on the proposed investment plan of Wells Fargo in India. He said the bank has no plans to penetrate the Indian territory by opening branches in the country, although they are well capitalised to do so.

?Usually, we do not prefer to enter the market that we do not understand properly,? said Ellis.

The executive vice-presidentof Wells Fargo was in the city to interact with some of the banks with whom it has correspondent relationship in the country.

Currently, Wells Fargo enjoys an associate bank relationship with many players in India, including HSBC, IndusInd Bank, Central Bank of India and Development Credit Bank. In 2007, Wells Fargo opened its technology development centre, a wholly owned subsidiary company, Wells Fargo India Solutions Ltd, in Hyderabad . It acts as a back-end support office of Wells Fargo?s global operations. The Hyderabad office currently employs more than 800 people.

As on June 30, 2009, the San Francisco, California headquartered Wells Fargo had $1.3 trillion in assets and 2,82,000 team members across over 80 businesses in the US.

Wells Fargo is currently the 12th largest employer and is the second largest bank in deposits, home mortgage servicing, and debit cards in the US. On October 28, 2008, Wells Fargo & Company was the recipient of $25 billion of the Emergency Economic Stabilisation Act Federal bailout in the form of a preferred stock purchase by the US government. On October 3, 2008, Wells Fargo rescued the failure of Wachovia for about $14.8 billion in an all stock buyout transaction.

In 2008, the net income and revenue of Wells Fargo were $8.49 billion and $52.38 billion, respectively. Wells Fargo posted net income and revenue of $3.17 billion and $22.5 billion for six months ended June 30, 2009.