Wells Fargo’s focus on energy show growth strategy
NEW YORK — Wells Fargo & Co is angling to cash in on the U.S. energy boom, as the fourth-largest U.S. bank looks for new avenues of revenue growth to overcome a slump in mortgage lending, its traditional driver of profits.
The bank is increasingly looking for lending, investment banking and investing opportunities in the oil and gas sector. It says it now employs the largest staff of petroleum engineers of any U.S. bank.
The energy sector has been one of the brighter spots in the U.S. economy over the last few years, thanks to the shale oil and gas discoveries and the fracking boom. It has made millions for wildcat drillers, mineral-rights holders and oil-and-gas firms and supercharged economic growth in North Dakota, Texas and other parts of the country.
Wells Fargo said the bank finances companies across the energy sector. These include companies specializing in exploration and production, those that own and operate pipelines and barges, and those that refine and process oil and natural gas.
Wells also said it is now the top underwriter of high-yield bonds and syndicated loans for oil and gas companies. Additionally, it has $500 million to $600 million in direct equity stakes in energy firms through its merchant banking activities.