May. 16, 2014, 7:21 AM
- Wells Fargo (WFC) opened an office in Aberdeen this week, hoping to get a piece of Scotland's east coast oil business as part of its U.K. expansion. The bank now has 930 people in EMEA, up from 600 at the start of 2012. Of those 930, 721 are in the U.K.
- The bank doesn't break out European earnings, but EMEA chief Jim Johnston says revenues have grown by at least 10% in each of the past three years.
May. 14, 2014, 10:17 AM
- Among those started at Buy is M&T Bank (MTB -0.9%), with analyst Bill Carcache noting the usually strong performer has lagged over the past 16 months amid regulatory issues and the delay of the Hudson City Bancorp (HCBK -1%) acquisition. Carcache expects approval this year, along with meaningful operating efficiency improvements. "We believe MTB shares are trading at a significant discount to their intrinsic value and expect to see meaningful share price appreciation through 2015."
- Also a Buy is Wells Fargo (WFC -0.8%), with Carcache seeing the bank as well-positioned if the economic recovery remains muted thanks to a combination of fee income and expense control.
- Started at Reduce with $40 price target is Comerica (CMA -1.7%), with Carcache saying the stock price has gotten ahead of itself.
- See also: More on Nomura's wide-ranging new bank coverage
May. 9, 2014, 3:26 PM
- “Jumbos are growing while almost everything else is dead,” says FBR's Paul Miller. “Big banks need loan growth. If they were getting decent commercial loan growth, they wouldn’t be so aggressive on competing for jumbos.”
- As the rest of the home loan market contracts (sharply), applications for jumbo mortgages (above $729K) were up 4.9% Y/Y in March. Another reason for banks plowing into jumbos: They don't have to pay the higher guarantee fees charged by the GSEs, allowing them to actually charge lower rates than on conforming loans. At Wells Fargo (WFC), the current rate for a 30-year fixed jumbo mortgage of 4.13% is 12 basis points less than that for a conventional mortgage loan.
- JPMorgan (JPM) is boosting its efforts and created a special process to review all declined loans to make sure the decisions make sense. It also has a group working with wealthier clients who have more complex financial situations, such as being self-employed. The bank's jumbo mortgage originations accounted for 21% of all mortgages in Q1, up from 10% a year earlier.
- At Bank of America (BAC -1.7%) the down payment required for most jumbos less than $1M was cut this year to 15% from 20%, and nonconforming originations in Q1 were 37% of all mortgages vs. 22% last year.
May. 8, 2014, 3:15 PM
- The Fed today releases for comment a proposed rule prohibiting a financial company from merging with another if their combination's liabilities would exceed 10% of the total of all financial companies.
- The move is another step in implementing the intent of the Dodd-Frank financial reform act. Comments are due by July 8.
- Only JPMorgan (JPM +0.5%), Bank of America (BAC +0.6%), Citigroup (C +0.7%), and Wells Fargo (WFC -0.2%) would be affected - at least in the short term - says the Financial Stability Oversight Council.
May. 6, 2014, 10:02 AM
- In an effort to lure more wealthy customers, Wells Fargo (WFC -0.6%) - through a partnership with American Express (AXP -0.7%) - is launching two new cards offering rewards to big everyday spenders or frequent fliers who also have another account with the bank. The new cards - Propel 365 and Propel World - offer up to an extra 50% in reward points depending on the size of a customer's accounts.
- Just 3% of consumers who charge more than $100K annually on their credit cards do it through a Wells Fargo product, according to a recent Wells presentation. At JPMorgan's February investor day, a slide showing what cards affluent customers choose didn't include Wells Fargo on the page. "We know we're under-penetrated in this customer base," says Beverly Anderson, the head of Wells' consumer financial services group.
May. 5, 2014, 10:20 AM
- A check of the global banks finds the group pacing market declines in morning action after Friday night's warning on Q2 trading revenue from JPMorgan (JPM -2.2%).
- Nomura's Steven Chubak is first out with lower JPMorgan earnings estimates.
- Jim Cramer sums up sentiment: "This has been a house of pain. You can't own these right now. You just can't."
- Morgan Stanley (MS -1.9%), Goldman Sachs (GS -1.5%), Citigroup (C -1.2%), and Bank of America (BAC -1%), Deutsche Bank (DB -1.2%). Far less trading dependent than the other Too Big Too Fails is Wells Fargo (WFC -0.2%).
- The iShares DJ U.S. Broker-Dealer ETF (IAI -1.2%)
- XLF -0.7%, KBE -0.8%
- ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, IAI, SEF, IYG, PFI, FXO, FNCL, KBWB, FINU, KCE, RWW, RYF, PSCF, FINZ, KBWC
May. 2, 2014, 3:42 AM
- Goldman Sachs (GS) and Morgan Stanley (MS) are on a Fed list of 15 U.S. and foreign financial firms that "may pose elevated risks to U.S. financial stability" and so will receive extra supervision by a cross-disciplinary special unit called the Large Institution Supervision Coordinating Committee.
- Other firms on the list include JPMorgan (JPM), Bank of America (BAC), AIG (AIG), GE (GE), Citigroup (C), Wells Fargo (WFC), State Street (STT), Prudential Financial (PRU), Barclays (BCS), Credit Suisse (CS), Deutsche Bank (DB) and UBS (UBS).
- As a major clearing and custody bank, Bank of New York Mellon (BK), will also receive the extra attention.
Apr. 29, 2014, 4:10 PM
Apr. 25, 2014, 9:43 AM| Comment!
Apr. 23, 2014, 3:13 PM
- Jonathan Weiss - currently co-head of investment banking and capital markets - is promoted to run the bank's securities unit, effective May 15. He'll replace John Shrewsberry, who's taking over the CFO slot from Tim Sloan who will be running WFC's wholesale-banking unit. Weiss' report will be Sloan.
- Weiss' investment banking co-head Robert Engel will lead the unit on his own following the move.
- Source: Press Release
- Previous: Management shuffle at Wells Fargo
Apr. 23, 2014, 2:45 PM
- BNY Mellon (BK +2.1%) has hired Goldman Sachs to find a buyer for the unit, reports Bloomberg, and is expected to begin receiving offers in about a month. The corporate trust arm assists companies with making payments on debt they issue as well as helping customers recover funds in event of default.
- The business services about $12T in outstanding debt, with 3.5K employees at 61 global offices, but has become less lucrative since the financial crisis made the packaging and selling of loans a more difficult business. Possible buyers could be large commercial banks looking to build out their own trust business such as Bank of America (BAC), U.S. Bancorp (USB), Wells Fargo (WFC), or PNC Financial, says Guggenheim's Marty Mosby.
- On a recent earnings call, BNY management said run-off in the unit would cut annual revenue by $50M-$75M annually, roughly 0.5% of total bank revenue.
Apr. 21, 2014, 10:17 AM
- A federal judge will allow Wells Fargo's (WFC +0.7%) dreaded foreclosure manual into evidence in the bankruptcy case of a former homeowner. The homeowner's lawyer alleges the manual is "a blueprint for fraud," and contains step-by-step instructions for - among other things - processing notes without endorsements.
- Previous coverage
- In other news, the D.C. revolving door brings two former CFPB officials closely involved with writing new mortgage rules into the bank's employ. Peter Carroll - the CFPB's assistant director of mortgage markets - is now senior VP of capital markets at Wells Fargo Home Mortgages, and Lisa Applegate - the bureau's mortgage-implementation lead - will start later this month as a strategic quality manager within the bank's home lending capital markets group.
Apr. 11, 2014, 10:52 AM
- Overall traffic to branches was strong in Q1 despite the brutal winter weather (JPM's CFO notably blamed the weather for having a role in its weak Q), says Wells Fargo (WFC +2%) CFO Tim Sloan on the earnings call (his last as CFO). The refinance boom now a bust, Sloan expects a strong purchase market to drive originations growth in Q2. Also commenting on housing/mortgages, CEO John Stumpf notes the number of those buying homes for cash is up.
- As for acquisitions, management says Wells is in a position to do a big one, but is going to be picky.
- Wells sits alone among the TBTF banks in the green in morning action. XLF -0.5%, KBE -0.35%
- Earnings call presentation
- Previous earnings coverage
Apr. 11, 2014, 8:19 AM
- Revenue of $20.6B fell from $21.3B a year ago. Net interest income of $10.6B fell $188M from Q4, with net interest margin of 3.2% off 7 bps. Noninterest income of $10B up $100M from Q4. Noninterest expense of $11.9B fell $137M Q/Q, $452M from a year ago. Efficiency ratio of 57.9% up 40 bps.
- Net income in Community Banking of $3.8B rose 31% Y/Y on revenue of $12.6B which fell 2% (lower mortgage action). Noninterest expense of $6.8B fell 8%, thanks, in part, to job cuts in mortgages.
- Wholesale Banking net income of $1.7B fell 15% from a year ago on revenue of $5.6B, off 8%.
- Wealth, Brokerage, and Retirement net income of $475M rose 41% from a year ago on revenue of $3.5B, up 8%.
- Common Equity Tier 1 ratio under Basel III of 11.36%.
- CC at 10 ET
- Press release, Q1 results
- WFC +0.5% premarket
Apr. 11, 2014, 8:05 AM
Apr. 11, 2014, 12:05 AM
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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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