At tournament time, Wells Fargo hones its pitch to businesses

During the nationwide broadcast of the Wells Fargo Championship golf tournament next week, the event’s namesake bank is hoping you won’t change the channel for the commercial breaks.

Especially if you own or run a business.

That’s because the San Francisco-based lender will debut its first TV commercial targeting companies with $20 million or more in annual revenue on May 14 during the telecast. Wells Fargo sponsors the event, which runs May 11 through May 17 at Quail Hollow Club in south Charlotte.

The commercial is part of Wells Fargo’s efforts to increase awareness of the products and services it offers companies through its wholesale banking segment, said Phillip Wang, marketing manager for the lender. In the case of some of those products and services, Wells Fargo has been offering them only since its purchase of Charlotte’s Wachovia in 2008.

“I think people know that we’re in commercial real estate, but they may not realize that we have investment banking capabilities,” Wang said.

Wells Fargo is widely known for the more traditional banking offerings it provides at its red-and-yellow branches that stretch nationwide. But it has been expanding into areas more common to Wall Street banks. That’s caused some analysts to question the risks associated with that growing business.

The commercial also comes at a time when banks are challenged to grow revenue, in part because the Federal Reserve has kept a key interest rate near zero since the financial crisis. Low rates restrict banks on what they can charge on loans, hurting their net interest margins.

It remains unclear when the Fed might begin raising interest rates. On Wednesday, the regulator downgraded its assessment of the economy, creating more murkiness about the timing of an increase.

Wells Fargo picked the tournament for the premiere because it attracts a TV audience that tends to be “very affluent” and made of powerful business people, Wang said.

“You just have a lot of the C-suite executives who are golfers,” he said.

Wells Fargo inherited the sponsorship when it bought Wachovia. After the purchase, Wells Fargo established its East Coast operations in Charlotte, where it employs roughly 23,000.

The new commercial will air on the Golf Channel and CBS, as well as on YouTube. A preview will be available at the bank’s @WellsFargoB2B twitter handle.

Bank spokeswoman Christina Kolbjornsen said the commercial features a group of people rock-climbing and narration about the expertise Wells Fargo can provide companies to help them move forward.

The bank declined to disclose the costs to produce the commercial. It said it will run on airtime the lender gets in exchange for its title sponsorship of the tournament.

At the tournament itself, Wells Fargo will have members of its social media team promoting the commercial on Twitter, LinkedIn and other social media platforms, Kolbjornsen said.

Wang said Wells Fargo had been considering making a commercial for the wholesale banking segment for at least a year. The lender has been providing wholesale banking to businesses since the 1800s, but some people might not be aware of all the segment’s offerings, he said.

Some of those are fairly new. Wells Fargo entered the investment banking and capital markets businesses through its acquisition of Wachovia. The lender maintains its largest number of investment banking employees in Charlotte, on trading floors in uptown’s Duke Energy Center.

While some analysts have raised questions about the increased risk of investment banking, Wells Fargo executives have downplayed the lender’s expansion, pointing to the relatively small amount of fees investment banking generates for the bank compared with the company’s overall revenue.

CEO John Stumpf said last month that Wells Fargo views investment banking as just another service it offers companies. Most of the revenues come from existing customers “we’ve been doing business with for a long, long time,” he said.

Still, wholesale banking has become a bigger part of the company. The unit generated about 28 percent of overall revenue last year, up from 19 percent in 2008.

Analyst Joe Morford said Wells Fargo’s new commercial could be designed to win more wholesale banking business from customers in anticipation of the Fed raising rates and further improvements in the economy.

Also, he said, wholesale banking has been a source of strong growth for the bank in recent years.

“The leading driver of loan growth has been commercial lending, and that’s principally coming out of their wholesale division,” he said.

This story was originally published May 1, 2015 at 6:04 PM with the headline "At tournament time, Wells Fargo hones its pitch to businesses."