Wachovia

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Wachovia

  1. 1. Wachovia Corp. WEI-JET HEW October 26 Finance Club
  2. 2.  History and Background Info  Business Segments  Strength and Opportunity  Risk Governance and Management  Valuation  Conclusion
  3. 3. Company  Formed in 1911  Chairman, President & CEO: G. Kennedy Thompson  $500 billion in assets  Fourth largest bank holding company in the U.S  Four Business Segments: General Bank, Capital Management, Wealth Management, Corporate and Investment Bank.  Focus: expense control, credit quality and productivity improvements.
  4. 4. Critical Success Factor  Revenue Growth  Expense Efficiency  Customer Loyalty  Employee Engagement  Corporate Governance  Merger Integration
  5. 5. Net Income as of 2004 56% 31% 4% 9% General Bank Capital Management Wealth Management Corporate and Investment Bank Overview of Business Segments
  6. 6. General Bank  Customer: Individuals, small businesses, commercial enterprises, and governmental institutions  Value Proposition: 1. Checking, lending and investing products and services for customers at every stage of life 2. Knowledgeable and reliable guidance 3. Specialized financial needs of businesses  Strategic Focus: 1. Long-term customer relationship 2. Customers at multiple services
  7. 7. Capital Management  Proprietary nonproprietary investment products & services to retail and institutional clients  Value Proposition 1. Achieve lifetime financial goals 2. Emphasis on disciplined investing and unbiased advice  Strategic focus 1. Creates a growing and diversified business with balanced mix of products
  8. 8. Wealth Management  Private banking, trust and investment management, financial planning and insurance services to high net worth individuals, families and businesses  Value Proposition 1. Fully integrated and objective approach incorporates all disciplines 2. Strategic partnerships with all other segments  Strategic Focus 1. Clients’ relationship, leveraging opportunity 2. Sophisticated, leading-edge solutions
  9. 9. Corporate and Investment Bank  Domestic and global corporate and institutional clients in 10 key industry sectors  Value Proposition 1. Focus on client needs, combined with capital raising capability and a leading treasury services platform 2. Integrated team approach, breadth of products & services, deep industry expertise  Strategic focus 1. Growing economic value for Wachovia shareholders
  10. 10. Strength and Opportunity  Modest economic growth and rising interest rates  Diversified business model to drive revenue growth through cross-business partnership  Strengthened banking market through acquisition and expansion  Strong credit quality and commercial loan growth  Diversified revenue mix
  11. 11. Risk Management Strategy  Business Units  Independent risk management function joined by other corporate staff functions: Legal, Finance, HR and Technology  Internal Audit  Risk committee
  12. 12. Valuation  Shares yielded 3.5%  14% discount to S&P 12-month target price of $58  One-year-return of 17% outperformed banking industry indices  Earning growth of 22% in 2004  Forecast EPS of 4.30 for year 2005
  13. 13. Conclusion 4 Star Recommendation: BUY

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