CLT Markets' Future

[nycbusdriver]

Charlotte has grown into a banking powerhouse in the last 30 years housing the third and fourth largest banking headquarters (BofA and Wachovia) in the US. Now, Wachovia is leaving the scene as CitiGroup takes over its operations.

This leaves Charlotte with only one big bank to brag about, as I doubt CitiGroup will relocate from Manhattan to Charlotte.

Just wondering out loud how this might affect the Charlotte economy in general, and USAirways in particular.

 

[USFlyer]

I'm sure CitiGroup will keep the Wachovia presence in Charlotte. There's no way they are moving those jobs to NY.

 

[Bobbie]

In any merger or, in this case, an acquisition, you're going to have a period of time when the two companies operate independently, with one acting as a wholly owned subsidiary of the other. Then, once it's organized enough, you eliminate the acquired company's duplicated job roles and keep just the ones necessary.

Wachovia Securities and Evergreen Asset Management are the only two companies left under Wachovia Corporation and that's essentially the old A.G. Edwards and Evergreen Investments and that's it. Those divisions are headquartered in St. Louis and Boston, respectively and were never in Charlotte. Its retail bank, corporate and investment bank and wealth management businesses are all gone now. Those made up the vast majority of their workforce and all of those businesses are being folded under the Citi banner. That leaves Charlotte with a grand total of nothing left for Wachovia, unfortunately.

You're going to see massive cuts at the corporate level and not so many at the retail level because Citibank really doesn't have a substantial overlap with Wachovia in that sector. This acquisition will give them a huge boost in the retail market.

I distinctly remember in 2006 when Wachovia bought Golden West (parent of World Savings out here in California). Ken Thompson, then chairman of Wachovia, went on CNBC and said “We feel like we are merging with a crown jewel." He continued, "This is a transformative deal for us.â€￾ Herb Sandler, Golden West's former CEO emphasized that the sale shouldn’t be interpreted as sign that Golden West is worried about a real estate meltdown saddling the company with huge losses, labeling those theories as “a bunch of garbage.â€￾

You can see why Wachovia ejected Ken Thompson as CEO and Chairman.

Anyone who lives in California knows about World Savings and Golden West. They were the banking equivalent of America's Cash Express, catering to let's just say a higher risk client base. I was shocked that Wachovia bought them then and I'm not surprised this happened as a result.

 

[cltrat]

and to think that piece of trash Thompson walked away with 28 mil. he should have been shot

 

[nycbusdriver]

I'm sure CitiGroup will keep the Wachovia presence in Charlotte. There's no way they are moving those jobs to NY.

Yes. They will certainly need two headquarters, just like USAirways kept their Crystal City operation going in parallel with Tempe.

Hint: You are correct that they won't be moving those jobs to New York. They won't be NEEDING those jobs anymore, hence the thread.

 

[Bobbie]

and to think that piece of trash Thompson walked away with 28 mil. he should have been shot

It was just awful what he did. The company had virtually no problems prior to then. Wachovia has traditionally been such a conservative company and that goes back to the FirstUnion days. Them getting in bed with Golden West and World Savings was so out of character for them. There was so much denial going into that deal i knew it was no good.

I think Bank of America and Citigroup are at the highest risk amongst the "big banks." They're very much tied up in the subprimes and high interest credit cards, lines of credit, etc. The risk is so high on those accounts.

Wells Fargo is probably in the best shape right now, with Chase coming out in the middle. Wells doesn't have nearly the exposure in subprime mortgages and they're so conservative in just about all aspects of their operation that I can't imagine anything happening with them. I used to say the same thing about Wachovia. Not anymore.