Wells Fargo Securities’ markets unit has joined the list of primary dealers recognised by the New York Federal Reserve, the latest sign of the firm’s ongoing pursuit of investment banking business.

It means the bank could do more trading with large institutions, some of which only trade with primary dealers. Primary dealers also trade US government debt and other securities directly with the New York Fed.

Currently the second largest US bank by deposits, Wells Fargo is known for its strong market share in mortgage banking, retail brokerage and insurance.

But it has been growing big its capital markets operations in recent years, including bond trading.

The group formed its markets division back in 2012, combining equity, fixed income sales and trading, commodities, prime services and futures clearing all under one brand.

In a statement, Walter Dolhare, head of Wells Fargo Securities' markets division, called the designation "a logical extension" of its business model.