As Wachovia Corp. wrestles with rising loan losses, the Charlotte bank is slowing its Western expansion, but it still aims for sizable growth in what it sees as attractive new markets.
On Thursday, the bank announced plans to open its first bank branch in downtown Los Angeles in early 2009. The location is across the street from L.A. Live, a new entertainment complex that counts Wachovia as one of its major sponsors. The move comes a month after the bank opened a commercial banking and wealth management office in L.A.
Wachovia got its first big foothold in California in 2006, when it acquired adjustable-rate mortgage specialist Golden West Financial Corp. The company's mortgage portfolio, however, has deteriorated, leading new chief executive Bob Steel to announce plans last month to slash jobs, cut the dividend and slow the pace of West Coast growth.
Spokeswoman Aimee Worsley said the bank plans to open 30 branches in California this year and 25 to 35 in California, Arizona and Nevada in 2009. That's down from earlier plans to open 40 to 60 branches per year just in California.
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Wachovia is in the top five in the state with 179 branches, but it's still far behind Charlotte rival Bank of America Corp., which has around 1,000 locations. Wachovia's top 10 branches by total deposits nationwide are now in California.
The bank also has become a big employer in California, although its work force of more than 9,000 is likely to drop with planned mortgage cuts.
The bank's efforts in L.A. tie into the city's work to revitalize downtown, said Frank Newman, Wachovia's Southern California president. “As downtown continues to thrive, Wachovia plans to be front and center,” he said.