Tue, May 24, 7:51 AM
- Wells Fargo Wallet will be available this summer via Android smartphone app, the bank is expected to announce today. In this, Wells Fargo (NYSE:WFC) will be joining JPMorgan in taking on Apple Pay and Android Pay, as well as offerings from others in which customers hold their phone over a payment terminal to pay.
- The service would not be available on iDevices.
- The total value of mobile-payments transactions is expected to hit $27B this year, more than triple from last year; it could reach $210B by 2019, according to EMarketer.
Fri, May 20, 12:11 PM
- "The days of negative provisioning are pretty much dead," says D.A. Davidson's Kevin Reevey. "Now, they're going to have to take provisioning expense and build up reserves based on loan growth."
- Total bank loan loss reserves were north of $250B in Q1 2010, before falling to about $24B at the end of last year. Amid the energy crash, they edged higher in Q1. Naturally, those lenders with the most exposure to energy posted some of the largest reserve increases in Q1. "It wasn't just the levels that [oil] went to, it was the speed at which prices dropped," says Peter Guilfoile, chief credit officer at one of those banks - Comerica (NYSE:CMA). Colorado-based National Bank Holdings (NYSE:NBHC) posted the largest Q/Q increase in reserves-to-loans, jumping 39 basis points to 1.43%.
- Meanwhile, there were plenty of other banks which actually saw declines in that ratio, notably Bank of America (NYSE:BAC), Wells Fargo (NYSE:WFC), and U.S. Bancorp (NYSE:USB). These and other lenders in that bucket can thank denominator of that ratio growing quickly enough to offset reserve builds.
- Source: SNL Financial's Zach Fox and Venkatesh Iyer
- ETFs: XLF, FAS, FAZ, KRE, UYG, VFH, KBE, IYF, BTO, IAT, IYG, FNCL, SEF, FXO, KBWB, QABA, KBWR, RYF, FINU, KRU, RWW, XLFS, FINZ, KRS, WDRW, DPST, FAZZ
Wed, May 18, 1:08 PM
- The meme of rates lower for longer has been stood on its head in the last 24 hours thanks to some decent economic data, but also surprisingly hawkish Fedspeak yesterday.
- The fixed-income world now believes remarks from the Fed's Williams and Lockhart yesterday may have been a preview of what we'll get when the real power speaks tomorrow - Fischer and Dudley - and then on May 27, when Janet Yellen gives a speech.
- Up at 2 ET are the minutes from the FOMC's April meeting.
- The 10-year yield is higher by five basis points to 1.82% and short-term rate markets have upped expectations for a Fed move this year.
- XLF +1.85%, KBE +3.15%, KRE +3.3%
- Bank of America (BAC +3.7%), Citigroup (C +4.2%), JPMorgan (JPM +3.2%), Wells Fargo (WFC +2.1%), U.S. Bancorp (USB +2.1%), Regions (RF +3.3%), KeyCorp (KEY +3.7%), PNC Financial (PNC +2.7%), Fifth Third (FITB +3.7%), Capital One (COF +1.9%), E*Trade (ETFC +4.4%), Schwab (SCHW +4.8%), MetLife (MET +2.9%), Prudential (PRU +3.4%), Lincoln National (LNC +4.2%), BNY Mellon (BK +2.3%), Northern Trust (NTRS +2.9%)
Wed, May 18, 11:12 AM
- Sweeping new compensation rules released by six federal agencies last month would free up pay restrictions for the BlackRock's (NYSE:BLK) of the world, while tightening them for banks like JPMorgan (NYSE:JPM), Wells Fargo (NYSE:WFC), Bank of America (NYSE:BAC), Morgan Stanley (NYSE:MS), and Goldman Sachs (NYSE:GS).
- Source: Bloomberg
- The result is likely an even stronger flow of talent exodus from the big banks and to outfits like BlackRock, Vanguard, Pimco, and Fidelity, to name four.
- “They keep making it more difficult to be a big bank,” says a D.C. attorney.
- At those lenders with more than $250B in assets, top management would have 60% of their bonuses deferred for four years. Tough, but even tougher are clawback provisions allowing banks to take back money up to seven years after bonuses vest.
- Though mammoth in size, the overwhelming majority of assets at BlackRock and the like are client, not proprietary assets. Thus, they aren't subject to the same restrictions. Franklin Resources (NYSE:BEN), for instance, has $743B in AUM, but only about $16B of its own assets. Blackstone (NYSE:BX) manages $344B, but only $22B of its own money.
Tue, May 10, 3:39 PM
- Taking aim territory served by OnDeck Capital (ONDK -2%) and LendingClub (LC -10.2%), Wells Fargo's (WFC +1%) FastFlex program will offer small business loans in as soon as one day.
- Loans will have have one-year maturities, and be in amounts ranging from $10K-$35K. Weekly payments will be required. The program has been in pilot mode since August, and will be rolled out in full later this month. The bank has a $100B lending goal.
- JPMorgan late last year began partnering with OnDeck to provide loans to its 4M small-business customers.
Tue, Apr. 26, 3:11 PM
Sun, Apr. 24, 6:27 PM
- via Credit Suisse, the 15 hottest large cap "rising stars," followed by the number of large cap funds that own them, and the change vs. prior quarter.
- SYF - Synchrony Financial, 74 | 47
- MSFT - Microsoft, 350 | 36
- GOOGL - Alphabet 324 | 39
- MCD - McDonald's, 104 | 24
- DAL - Delta Air Lines, 114 | 19
- GPN - Global Payments, 34 | 19
- TSN - Tyson Foods, 61 | 18
- CVX - Chrvron, 180 | 17
- DFS - Discover, 90 | 16
- RTN - Raytheon, 85 | 16
- WFC - Wells Fargo, 250 | 16
- GIS - General Mills, 63 | 15
- JPM - JPMorgan Chase, 276 | 15
- URI - United Rentals, 36 | 15
- CBS - CBS Corp., 65 | 14
- CMCSA - Comcast, 223 | 14
- "We are wary of owning too many Rising Stars, as the potential for differentiation has diminished,"
Tue, Apr. 19, 1:29 PM
- Having had some time to digest weak, but better-than-hoped Q1 results for the nation's largest lenders, Goldman analyst Richard Ramsden remains bullish on the likes of Bank of America (NYSE:BAC), Citigroup (NYSE:C), and Wells Fargo (NYSE:WFC).
- He notes NIMs expanded - meaning banks held onto most of the benefit from the Fed's December rate hike. Cost-cutting programs are beginning to bear fruit, with 9% Y/Y cuts in compensation costs, and 3% declines in non-comp expenses.
- As for energy, provisions made for a 9% drag on EPS, but reserves now stand at 6% of funded energy loans, or 11% of E&P oilfield service loans.
- Ramsden is looking for robust loan and deposit growth for the rest of this year.
- His favorite name is Bank of America with a $17 price target (vs. current $14.39). The stock trades at 10.5x 2016 earnings, but probably has the most sensitivity to higher rates, and the most core and non-core expense leverage.
Tue, Apr. 19, 4:45 AM
- One of the bond market's most exclusive clubs has a new member. Wells Fargo (NYSE:WFC) has become the 23rd primary dealer, which trades directly with the NY Fed and is obligated to underwrite U.S. government debt sales.
- It's the first addition to the list since February 2014, when the Toronto-Dominion Bank was included.
- The roster of primary dealers has now grown to 23 firms from as low as 17 in 2008, although it remains below its 1988 peak of 46.
Fri, Apr. 15, 10:16 AM
- All of a sudden, it's the "Too Big To Fail" class favorite that's under the gun.
- First, there have been a number of articles suggesting Wells Fargo (NYSE:WFC) as the big lender playing loosest and fastest in the now-crashed energy patch. Then it was D.C. regulators who lumped Wells Fargo in with the usual suspects as they rejected nearly all of the country's biggest lenders' living wills. Third, bank earnings season is underway, and while JPMorgan, Bank of America, and Citigroup partied after their somewhat lame but better-than-hoped results, Wells Fargo has sold off a bit following its report.
- Piper Jaffray has seen enough and today downgrades to Underweight from Neutral. It's the bank's 2nd downgrade this week. Wells is lower by 1.25% today and 12.1% Y/Y - better than Citi's 14% decline, but worse than Bank of America's 10% loss and JPMorgan's 3% fall.
- Now read: Wells Fargo: Some Problems, Finally? (April 15)
Thu, Apr. 14, 8:22 AM
- Community Banking net income of $3.296B down from $3.547B a year ago. Provisions of $720M up from $658M. Noninterest expense of $6.836B up from $6.591B. Average loans of $484.3B vs. $472.2B. average deposits of $683B vs. $643.4B.
- Wholesale Banking net income of $1.921B down from $1.974B a year ago. Provisions of $363M up from $126M a quarter ago and from negative $51M a year ago (energy).
- Oil and gas loan portfolio of $17.8B, or 1.9% of total loans. Total exposure of $40.7B. 34% of unfunded commitments are to investment grade companies (66% are not). Nonaccrual loans of $1.9B up $1.1B during the quarter. $1.7B allowance for credit losses allocated to oil and gas portfolio.
- Wealth and Investment Management net income of $512M vs. $529M a year ago. Average assets of $208.1M up from $191.6M.
- Quarterly supplement
- Conference call at 10 ET
- Previously: Wells Fargo beats by $0.01, beats on revenue (April 14)
- WFC -1% premarket
Thu, Apr. 14, 8:03 AM
- Wells Fargo (NYSE:WFC): Q1 EPS of $0.99 beats by $0.01.
- Revenue of $22.19B (+4.3% Y/Y) beats by $590M.
- Shares +0.7% PM.
Wed, Apr. 13, 5:30 PM
Wed, Apr. 13, 4:32 PM
- According to the Office of Financial Research's annual report, Wells Fargo (NYSE:WFC) poses an increasingly serious threat to financial stability, while the other large banks have changed relatively little over the past year.
- Wells Fargo's too big too fail brethren are still risker than Wells, according to the report, but while Wells Fargo's score of 202.6 rose 18% from a year ago, JPMorgan, for instance, was about flat at 494.7 (JPMorgan is deemed the riskiest).
- Source: Reuters
- Now read: Wells Fargo & Co. Stock Analysis (April 13)
Wed, Apr. 13, 11:31 AM
- JPMorgan's revenues and profits both fell from a year ago, but the lame performance of the banks thus far this year has already priced in a weak quarter. JPMorgan is higher by 3.8%, with Citigroup (C +4.7%), Bank of America (BAC +3.5%), Wells Fargo (WFC +1.7%), Goldman Sachs (GS +2.9%), and Morgan Stanley (MS +4.4%) joining the party. The XLF is higher by 1.75% vs. the S&P 500's 0.7% advance.
- But what about all of these players (except for Citi) having their living wills rejected by the Fed, FDIC, or both? A sideshow, no doubt. Regulators are going to regulate - like the commercial goes, "It's what they do." Banks will tweak plans, numbers, or whatever they need to in order to get D.C. to eventually sign off.
- ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, BTO, IAI, IYG, FNCL, SEF, FXO, RYF, KCE, FINU, RWW, XLFS, FINZ, FAZZ
Wed, Apr. 13, 8:48 AM
- Like all of its peers, Wells Fargo (NYSE:WFC) has billions of dollars of exposure to the crashed energy sector, but, writes Dan Freed, Wells appears to have ventured deeper into risky areas than its rivals, and now the bill is coming due.
- Perhaps the riskiest exposure is within the bank's Energy Capital unit, which looked for big returns through equity investments and high-risk loans to smaller outfits. Consider Cubic Energy in which Wells had nearly a 10% stake in worth $25M as of the end of last year. That was wiped out on March 1 when Cubic's bankruptcy plan went into effect. On top of that, Cubic owned Wells nearly $30B in debt, thus making the bank the owner of land and other assets of undetermined value in Louisiana as part of the reorganization.
- Wells Fargo Energy Capital is small compared to the bank's nearly $1T loan portfolio or even its $42B energy loan book, but it nevertheless has raised concerns among investors and analysts. The portfolio had a value of $2.1B as of January 2014, according to an old presentation. A source says it's about the same size today, but many analysts expect an eventual markdown.
- Now read: Stock Buy - Wells Fargo Bank (April 12)
Wells Fargo & Co. is a nationwide, diversified, community-based financial services and bank holding company. It provides banking, insurance, investments, mortgage, and consumer and commercial finance through its stores, ATMs, the Internet, and other distribution channels across North America and... More
Industry: Money Center Banks
Country: United States
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