With Wells Fargo emerging victorious from a bloody battle over Wachovia earlier this week -- it seems so, like, last week already, doesn't it? -- some details over just how bad things were for Wachovia are emerging. From the Decatur Daily via Trading Markets:
Court filings by Citigroup revealed that on Sept. 26, shortly after Washington Mutual failed, Wachovia lost $5 billion in deposits in a "silent run" on the bank. In another court document unsealed Friday, a Wachovia executive said the bank's deposits dropped by another $2.4 billion on Monday after Citigroup tried to block the Wells Fargo bid.
$2.4 billion in deposits evaporated in one day; that's a TON. And it shows just how bad things had gotten for Wachovia, and why Citigroup had little choice but to capitulate here; Wells' executives clearly have a ruthless side to them. A source with knowledge said privately to me that Wells knew that making the offer would work, because "Wachovia would bleed once the offer came out." Wells officials have stressed that they do not expect to lay off Wachovia employees as part of the merger, but some questions are starting to emerge on that front. At the very least, the thousands of employees in Wachovia's investment banking unit should be breathing easier -- a Citi acquisition would have meant certain death for the unit. But Wells Fargo, for all of its strength in more traditional commercial banking, has very little of a footprint in investment banking. And let's be honest: there aren't exactly a ton of buyers lining up to buy an investment bank these days, anyway. So Wells may be stuck with what it bought here. But Wachovia employees at corporate headquarters may have a reason to be worried, according to the Charlotte Observer:
The bigger question, analysts said, will be who keeps back-office and technology jobs. Wachovia employs about 20,000 workers in Charlotte, many at its corporate headquarters uptown, and those could be the jobs that are most in danger. "You don't need two personnel departments, you don't need two finance divisions," said Gerard Cassidy, an analyst at RBC Capital Markets. "They will still have a material presence in Charlotte -- it's just not going to be that large."