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Oct. 14, 2015, 12:57 PM
- "Whatever savings we get by being thrifty, we reinvest elsewhere," says Wells Fargo (WFC -0.4%) CFO John Shrewsberry, speaking on the earnings call. "You save on one side and you invest on the other side," says CEO John Stumpf.
- Money the bank is saving in ares like travel expenses and cutting the real estate footprint is being spent in areas like regulatory compliance and technology. For this reason, management says not to expect efficiency ratio - at 56.7% in Q3 - not to fall a whole lot further as long as the sluggish revenue environment persists.
- More GE Capital purchases (the bank has already made three this year)? Unlikely, says Stumpf. Most of what GE has left to sell is outside of the U.S. - not an area of focus for Wells.
- In a tweak to the organizational structure, the asset-management business is being added to the wealth, brokerage, and retirement division, with the whole thing to be renamed Wealth and Investment Management.
- Jefferies' Ken Usdin says the bank matched estimates thanks to gains from equity investments which helped offset negative trading results. Growth in fees from higher service charges, card fees, and lease income was "more than offset" by drops in other units like mortgage banking and trading.
- Live Blog at WSJ
- Webcast and quarterly supplement
- Previously: Wells Fargo lower after meeting estimates (Oct. 14)
- Previously: Wells Fargo EPS in-line, beats on revenue (Oct. 14)
Oct. 14, 2015, 8:20 AM
- Q4 income of $5.8B of $1.05 per share vs. $5.7B and $1.02 one year ago.
- ROA of 1.32% down eight basis points, ROE of 12.62% down 48 bps. Efficiency ratio of 56.7% improved 100 bps. Net interest margin of 2.96% down ten basis points.
- Noninterest income of $10.4B rose from $10B in Q2, with mortgage banking noninterest income of $1.6B slipping $116M. Residential mortgage originations of $55B slipped $7B.
- Total loans of $903.2B rose $14.8B during the quarter.
- Total average deposits of $1.2T rose 5% annualized during the quarter and 6% from a year ago. Average deposit cost of eight basis points slipped two bps from a year ago.
- Fully phase-in CET 1 ratio of 10.7%. 51.7M shares repurchased during quarter.
- Conference call at 10 ET
- Previously: Wells Fargo EPS in-line, beats on revenue (Oct. 14)
- WFC -0.9% premarket
Oct. 14, 2015, 8:04 AM
- Wells Fargo (NYSE:WFC): Q3 EPS of $1.05 in-line.
- Revenue of $21.88B (+3.2% Y/Y) beats by $120M.
Oct. 13, 2015, 5:30 PM
Oct. 13, 2015, 9:40 AM
- General Electric (GE +0.2%) has agreed to sell the largest remaining chunk of its U.S. financial services business to Wells Fargo (WFC -0.3%), part of the conglomerate’s ongoing bid to slim its operations.
- While the terms of the sale weren't disclosed, the businesses collectively have about $32B of assets.
- "Since our April 10 announcement, we've signed more than $126B in transactions, which is over 60% of our overall plan, and are on track to become less than 10% of GE's earnings as the company transitions to a more focused digital industrial company," GE Capital CEO Keith Sherin said.
- The transaction is expected to close in the first quarter of 2016.
- Previously: Reuters: GE nears deal to sell $30B-plus of loans to Wells Fargo (Oct. 09 2015)
Oct. 9, 2015, 6:07 PM
- GE is in advanced talks to sell a specialty finance portfolio worth more than $30B to Wells Fargo (NYSE:WFC), Reuters reports.
- WFC has so far outbid other parties for GE's vendor financing, commercial distribution finance and direct lending, and could announce a deal by the time WFC releases its Q3 earnings on Wednesday, according to the report.
- The sale of the loans would leapfrog GE well past its target of shedding ~$100B worth of finance assets by year-end.
Oct. 9, 2015, 8:03 AM| Oct. 9, 2015, 8:03 AM | 1 Comment
Oct. 8, 2015, 4:10 PM
- Wells Fargo (NYSE:WFC) is the country's second-largest private student loan originator and services all of its private loans, so it should be no surprise the Consumer Financial Protection Bureau - which has been busy probing student loan servicers - has been investigating Wells since at least last year. reports the WSJ.
- The exact issues aren't known, but the CFPB typically focuses on payment processing and what steps lenders are taking to help out distressed borrowers.
- Discover - the 3rd largest private student loan originator - settled with the CFPB in July, and Citigroup in August said it was facing an investigation.
- Navient (NASDAQ:NAVI) - which was spun out of SLM Corp. last year - is also under probe by the CFPB as well as a number of state attorneys general.
Oct. 7, 2015, 8:33 AM
- A badly-burned Bank of America (NYSE:BAC) won't do it anymore, but JPMorgan (NYSE:JPM) - aiming to make up for slowing business in its mortgage operation - is increasingly buying loans from smaller lenders, writes Dan Freed for Reuters.
- In H1, the Bank of Dimon bought 62% of the $58B in residential mortgages added to its books, up from 56% in 2014 and 37% in 2011. According to Inside Mortgage Finance, JPMorgan has shown the biggest increase among peers in so-called correspondent lending.
- "As they gain more confidence about the environment, they go right back to the correspondent channel for more volume," says analyst Charles Peabody. "There's more risk in being that far away from the customer," says BofA's Steve Boland, who leads mortgage and auto lending. For its part, JPMorgan says it only works with "experienced, well-managed, and high quality lenders," and reviews every loan in detail.
- Wells Fargo's (NYSE:WFC) Eric Stoddard - who runs the bank's correspondent business - says it's cheaper to buy mortgages from other lenders than to make the loans itself.
- "I think Bank of America's (policy) is a little foolish," says lender Ken Perimutter, whose PERL expects to make about $1.6B in home loans this year, and sell about 60% of those to JPMorgan.
Oct. 1, 2015, 8:33 AM
Sep. 30, 2015, 7:45 PM
- General Electric (NYSE:GE) agrees to sell its railcar leasing business to Wells Fargo (NYSE:WFC), and sells its tank car fleet assets and railcar repair facilities to Marmon Holdings; terms of the deals are not disclosed.
- The deals dismantle what was General Electric Railcar Services, a $4B-asset business that leases freight and tank cars and offers loans and maintenance services, and adds to a series of GE divestitures as the company seeks to return to its industrial roots.
- WFC says the deal will make its First Union Rail division the second-largest railcar and locomotive lessor in North America, adding to its existing fleet of more than 77K cars and ~1K locomotives.
Sep. 17, 2015, 2:37 PM
- It'll be at least a little while longer until banks and insurers get the higher rates they are hoping will boost sluggish profits, as the Fed holds its fire this month.
- The "dots" however are still projecting at least one rate hike before year-end.
- The SPDR KBW Regional Banking ETF (KRE -1.4%), and the SPDR KBW Bank ETF (KBE -1.2%).
- BofA (BAC -1.7%), Wells Fargo (WFC -1.2%), Regions (RF -2%), KeyCorp (KEY -1.8%), BB&T (BBT -1.7%), Fifth Third (FITB -2.4%), MetLife (MET -2.2%), Prudential Financial (PRU -1.9%), Schwab (SCHW -2.2%), Ameritrade (AMTD -2%), E*&Trade (ETFC -1.2%).
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, BTO, IAT, SEF, IYG, FXO, FNCL, KBWB, FINU, QABA, KRU, KBWR, RWW, RYF, PSCF, FINZ, KRS
Sep. 14, 2015, 11:15 AM
- With market eyes on a Fed rate-hike decision considered to be a bit of a toss-up amid differing opinions, Goldman Sachs is banking on the (slightly) more dovish position that the agency will wait until December. The bank is still laying out how to play the hike when it invariably comes.
- Strength in balance sheets is what you need, it says, noting that those companies outperform (by an average 5%) in the three months after a rate-boosting cycle begins. In Goldman's "High Quality Stock" basket: CMG, DLTR, PEP, KMI, BLK, GOOG, AAPL, PCLN, ORCL, WFC.
- Meanwhile, it suggests avoiding companies with high floating-rate debt as they bear the brunt of a move away from near-zero interest rate policy. "When the tightening cycle finally starts, the immediate impact will be felt by firms with high proportions of variable rate borrowing."
- Included in that "avoid" list: CL, COL, JNJ, AAPL, EBAY, MET, KO, GIS, F, MCD, GM, TWX, CVX, AGN, MON.
- (Yes, cash-rich Apple made both lists, having a strong balance sheet along with floating debt.)
Sep. 14, 2015, 9:52 AM
- Wells Fargo (NYSE:WFC) has named Frank Pizzo president of its EMEA (Europe, Middle East, Africa) region, where he'll succeed Jim Johnston.
- Johnston will return to the U.S. at year's end, while Pizzo heads to London pending regulatory approval.
- Pizzo is currently head of the bank's Loan Syndications and High Yield Debt Capital Markets Group. He'll take over more than 1,000 employees in EMEA. Pizzo joined Wells Fargo in 1998.
Sep. 8, 2015, 7:53 AM
- Both Evercore ISI and Deutsche buy the dip in Wells Fargo (NYSE:WFC) with upgrades to Buy. Evercore's PT is $57 and Deutsche's is $60. WFC closed at $51.31 on Friday.
- Also helping is a sizable rally in U.S. stock index futures, with the S&P 500 currently higher by 1.7%.
- Shares +2.4% to $52.53 premarket.
- See also: Deutshce find three rough-up financials to Buy (Sept. 8)
Sep. 2, 2015, 9:05 AM
Wells Fargo & Co is a diversified financial services company. It provides retail, corporate and commercial banking services through banking stores and offices, the internet and other distribution channels to individuals, businesses and institutions.
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