- Wells Fargo’s investment bank is having its best year, jumping to 7th in 2025 U.S. M&A league tables from 14th in 2024.
- Momentum accelerated after the Fed lifted the bank’s long-running ~$2T asset cap, enabling more balance-sheet-intensive Wall Street activity.
- The bank has rebuilt its advisory franchise by hiring 90+ managing directors in three years and winning higher-profile mandates.
- Marquee work includes co-advising Netflix’s bid for Warner Bros Discovery and committing a record $29.5B of a $59B bridge loan, though Wells still trails top-tier rivals on scale and fees.
Read More
Wells Fargo’s investment banking “best ever” year reflects a deliberate pivot under CEO Charlie Scharf toward higher value Wall Street businesses—and not merely as diversification. Seven years of regulatory shackling via the ~$2 trillion asset cap—imposed after the 2016 fake-accounts scandal—had restricted its ability to expand and compete. The lifting of that cap in mid-2025 unlocked latent growth potential, allowing both balance sheet expansion and regulatory risk visibility to normalize.
A core part of the transformation has been talent acquisition: the bank hired more than 90 Managing Directors across investment banking areas in the past three years, including high profile hires like Jeff Hogan (from Morgan Stanley), Doug Braunstein (formerly JPMorgan), Derek Van Zandt, and others to lead sector teams. These hires served both to win high visibility mandates and to reshape its client trust and reputation in the M&A advisory space.
Wells Fargo’s participation in marquee transactions has bolstered its repute and fee pool. The most prominent example is Netflix’s proposed acquisition of Warner Bros Discovery (WBD), where Wells Fargo committed $29.5 billion of a $59 billion bridge loan—this is the largest ever commitment by a single bank for an investment-grade bridge facility—and also earned advisory credit.
Financial results through Q2 and Q3 2025 show supports this strategy: while net interest income grew modestly (with some quarters showing declines YoY due to rate or deposit cost pressures), non-interest income—driven by investment banking and advisory fees—posted stronger growth. For Q3 2025, revenue rose ~5% YoY, non-interest income by ~9%, with EPS up ~17%.
However, the firm still lags the major banks in certain dimensions. Goldman Sachs led global M&A in 2025 by deal value and fee revenue at ~$1.48 trillion in deals advised; Wells Fargo, now 7th in U.S. M&A rank, is not yet in that elite group. Also, its outlook for net interest income in 2025 is cautious—with expectations to be flat versus 2024 in some statements—reflecting both rate pressures and competitive/compositional constraints.
Strategic implications: Wells Fargo has now shown credibility as an investment banking player and is likely to win more mandates, particularly in sectors where its hire base has strength (media-TMT, industrials, financial sponsors). But execution risk remains—managing deal pipeline, regulatory and compliance tail risks, cost discipline, and holding onto star talent.
Open questions:
- How quickly can Wells Fargo scale investment banking fee income to rival the current leaders, in absolute dollars, not just ranking movements?
- To what extent will market/regulatory headwinds (interest rate shifts, capital cost, deal volume contraction) impact its growth path?
- Can Wells maintain competitive advantage in hiring and retention, particularly if rivals accelerate their own investment banking investments?
- What are Wells Fargo’s risk metrics in new areas (e.g., bridge loan exposure, underwriting risk), given its past regulatory failures and the growing complexity of deals?
Supporting Notes
- Wells Fargo advanced from 14th to 7th in U.S. M&A league tables in 2025; its best ranking since these tables began in 1980.
- The bank has hired 90+ Managing Directors over three years, including leaders for sectors such as media & telecom, industrials, healthcare, and financial sponsors.
- In Netflix’s $72B bid for Warner Bros Discovery, Wells Fargo committed $29.5B toward a $59 billion bridge loan—the largest single-bank commitment ever for an investment-grade bridge facility—and also co-advised the deal.
- Net interest income rose modestly (or fell YoY in some quarters due to rate pressures), while non-interest income, including investment banking fees, increased ~9% YoY in Q3 2025.
- Revenue growth in Q3 2025 was ~5% YoY (total revenue), EPS $1.66 vs ~$1.42 a year earlier (≈17% rise); return on tangible common equity (ROTCE) target raised to 17-18%.
- Wells Fargo was liberated from its ~$2 trillion asset cap by the Federal Reserve in June 2025, lifting a long-standing constraint on balance sheet growth and Wall Street activity.
- By contrast, Goldman Sachs led globally in M&A in 2025, advising on ~$1.48 trillion in deals, reflecting the scale while Wells Fargo is still building.