Cautious Wells Fargo reluctant to dash off to foreign lands Wells Fargo has been one of the biggest success stories of banking measured by the premium it is awarded in the market. With a much smaller balance sheet than rivals such as JPMorgan Chase or HSBC, it still just trumps them as the bank with the biggest market capitalisation in the western world at $217bn. Industrial and Commercial Bank of China takes the global prize. But having established a dominant position in the US mortgage market, analysts are worried it is running out of room to grow, forcing it to increase its presence internationally and in investment banking. Chief executive John Stumpf, however, never sounds completely comfortable with overseas adventures or Wall Street, perhaps because the San Francisco-based bank's premium rating has been earned in part by staying out of riskier ventures. "We are largely a domestic bank, and we like it that way," he says. The bank did act as adviser and provided $14bn of debt financing for one of the biggest deals this year: the acquisition of Heinz by Warren Buffett's Berkshire Hathaway and 3G Capital, the Brazilian private equity firm. The balance sheet of JPMorgan, also involved in the Heinz financing, is still prized for big deals; Wells Fargo is now in the mix. "We helped Buffett," says Mr Stumpf. Every box got checked: we knew the borrower, we knew the company, we knew the acquiring company. That doesn't mean we'll do tons of those deals. It has to make sense for our stockholders. The leading shareholder in Wells also happens to be Berkshire Hathaway. "But it was more than that," says Mr Stumpf. Heinz is a great company. Berkshire Hathaway and 3G put tons of capital up front. Everything just lined up. Wells is hiring people and increasing its presence in bond trading, but Mr Stumpf is far from gung ho. We're not sitting here trying to time markets or play one asset class off against another. That is not the focus of our business," he says. You're going to find a Buffett, or a large company or even a medium-sized company that needs a valuation, or needs somebody to help buy or sell a business or issue stock or float some debt. Hemmed in by a rule that no bank can acquire a rival if it has more than 10 per cent of the nation's deposits, Wells, which exceeds that level, cannot buy up the competition. But Mr Stumpf notes he could buy a retail brokerage or an insurance distribution platform. In terms of organic growth, what attracts the chief executive more is the relatively unsexy business of credit cards, where, unlike mortgages, Wells is under-represented. We're so much more than just mortgage. We are underserving the market in credit card," he says. The bank had a somewhat conservative approach to cards, eschewing rewards programmes and at one time restricting its customers to only one card. Internationally, Wells does have toeholds in other markets, but Mr Stumpf is not looking to open branches like Citigroup or establish big commercial banking operations abroad like JPMorgan. He says the 3 per cent of revenue made overseas is probably not going to change a lot. "We're enthusiastic about what we're doing internationally, but it's not a "push."" Though he was pleased in a recent trip to see plenty of cranes in London and took the construction as a positive sign for the UK economy, he was struck more by Europeans" support for the US recovery. "I know when I was in Europe last week there was a lot of excitement about what's happening in America," he says. There are some powerful strengths. Think about the health of the financial services industry, energy - we might be self-dependent in energy in 10 years; who would have guessed that? The economy has gone through a lot, we could be on the cusp of really robust or much stronger growth. What does it take to get there? A good shot of confidence. A double latte of confidence is what we need here. Asked in response whether politicians in Washington might be the baristas, Mr Stumpf seems unconvinced, perhaps because he sees that role for himself.