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Click on individual bank names in the table below to access American Banker's coverage of each company's earnings report. Links to relevant coverage, filings, releases, and bank benchmark profile data can be found in the Related Links area of each article.
July 28
Wells Fargo & Co.'s 29% jump in second quarter earnings reported earlier today overshadowed what at least on its face was a similarly impressive performance in an area that's something of a Holy Grail for commercial banks — cross-selling.
The average number of products that the San Francisco-based bank sold to each of its customers rose by 0.2 during the quarter to a total of 5.84. While the criteria banks use to report cross sales are fuzzy, Wells' figure is the envy of the industry.
But selling customers more products is one thing; making money at it is something that's vexing even Wells, conceded Chief Financial Officer Tim Sloan in an interview with American Banker following its earnings announcement.
"Folks have been appropriately skeptical about cross sell for years," Sloan said. "You don't report cross sell as your primary financial reporting."
Even as rivals such as JPMorgan Chase & Co pursue cross sales as a formula for growth in a sluggish economy, Wells may have reached the point of diminishing returns. If a bank's most potentially lucrative cross-sales clients have been tapped out, after all, it will have no choice but to take the strategy downmarket to those with whom the payoffs are scarce.
Sloan doesn't buy the argument that Wells' cross-sales are tapped out. Instead, he's confident that cross-sells rates still accurately represent "the breadth of a customer's relationship" with the bank and that it's only a matter of time until growth translates into revenue and income.
Wells Fargo "bankers don't get credit for selling you three checking accounts," he said. Rather, Wells has made its cross-sales figures hard to game and uses them as only one of several factors that go into determining how much its retail employees are paid.
"There are periods of time when revenue grows faster than cross-sell," Sloan said. "Our business model would benefit from an increase in rates. And then there's the regulatory effect on consumer businesses. We're in the process of changing prices, changing product design."
Focus matters, too. With Wells' integration with Wachovia nearly behind it, the bank will have one fewer thing to distract it from its cross-selling focus.
"There are only so many hours in the day," Sloan says. "We're getting a pickup once conversions are over with ... Credit card growth is up over 140% in the East versus a year ago."
