Ken Thompson interview: Wachovia on Wall Street
Wachovia's Ken Thompson wants his firm to be the best financial institution in the US. His ambitions extend to investment banking. As Wachovia makes its move on Wall Street, Kathryn Tully spoke to Thompson and the rest of his management team. Should the traditional bulge bracket be concerned?
WHEN BANK OF AMERICA bought credit card company MBNA for $35 billion in June, shares of another major bank headquartered in Charlotte, North Carolina took an immediate hit. Investors were convinced that Wachovia, having missed out on the chance to buy MBNA, would be forced into a hasty, large and highly dilutive acquisition.
The heat was on Wachovia, the fourth-largest US bank by assets after Bank of America, Citigroup and JPMorgan Chase. Stories circulated of reporters camping out in the lobby of Wachovia One in Charlotte to see if they could spot anyone arriving for meetings on the executive floor there. Among the many theories circulating, one suggested that Wachovia was on the verge of tying up with Morgan Stanley. Indeed, Wachovia was said to have been mentioned as a possible partner at a Morgan Stanley board meeting last summer.
Shareholders didn't have to wait too long for Wachovia's next move, although it wasn't the blockbuster that everyone had expected. On September 12, the bank announced that it was buying California-based Westcorp and its majority owned auto lender WFS Financial for approximately $3.9 billion, making it the ninth-largest auto lender in the US. The next day it said it acquired AmNet Mortgage, also in California, for $83 million.