Someone please explain to me the wisdom
of Wachovia’s decision
to open it first full-service branch in Los Angeles. It’s not as if the company has perfected the art of running branches in markets where it’s already tried to establish itself. If you want to spend a few moments of quiet solitude in New York, for instance, all you have to do is walk into just about any Wachovia branch there. The company’s Manhattan locations are well-designed, sparklingly new—and almost all bereft of customers.
In Philadelphia, meanwhile, supposedly one of the company’s strongest markets Wachovia is lately advertising five-year CD yields of a whopping 5.85%. For reference, Bankrate.com says the average five-year CD in Philly yields just 3.63%.
Does Wachovia funding problem we don’t know about? Companies that routinely top customer satisfaction surveys aren’t supposed to have to pay up for deposits. But Wachovia’s value proposition was never as compelling as its high survey numbers implied. Now that the company is bleeding capital and is scrambling to fix the mortgage mess it created for itself, it’s having to scramble for funding any way it can find it. Bob Steel has his work cut out for him.
What do you think? Let me know!