Monday, June 16, 2014

Wells Fargo approaching most valuable U.S. bank

Wells Fargo is on the verge of being the most valuable U.S. bank of all time, as its stock-market value approaches the record set by Citigroup in 2001, The Wall Street Journal reports.

San Francisco-based Wells Fargo, whose East Coast headquarters is in Charlotte, has a stock market value of about $269 billion. That's about $13 billion shy of Citigroup's record of $282.75 billion, according to the newspaper.

A rally in Wells Fargo's stock has been boosting its stock-market value, or market capitalization, which is calculated by multiplying the number of outstanding common shares by the current market price of a share.

Shares of Wells Fargo, the fourth-largest U.S. bank by assets, closed at $51.09 on Monday, up about 12% for the year. Larger rivals JPMorgan Chase & Co., Bank of America Corp. and Citigroup are all down in 2014.

Tough rules on risk-taking and a slowdown in trading are weighing on profits at investment banks, the newspaper reports. But Wells Fargo, which has never been a big trading firm, has focused on generating revenue from its bread-and-butter businesses of commercial and consumer lending and mortgages as rivals pulled away after the financial crisis, the paper says.

Here's an excerpt from the story:

All told, Wells Fargo made $36 billion worth of mortgage loans in the first quarter, with an industry-leading 16% market share, according to data provider Inside Mortgage Finance. It has about 6,200 branches, the most among U.S. lenders, and is the third-largest bank by deposits, one spot ahead of Citigroup.
In the past six years, Wells Fargo has added about 104,000 jobs, largely through its acquisition of Wachovia Corp., while Citigroup has cut about 120,000 as it eliminates businesses. The other megabanks have added smaller numbers of jobs over the same period.
As the story points out, Wells Fargo also faces numerous lawsuits -- which, as we all know, is not unusual for large banks these days.

For example, the bank is battling a civil case filed by the Federal Housing Administration lawsuit over home mortgage loans.

The bank is also defending itself in a lawsuit brought by the city of Los Angeles, which has accused it and other banks, including Bank of America, of giving minorities home loans they couldn't afford, causing a flood of foreclosures and a reduced tax base.


Anonymous said...

"Hey, quick, the banks are making money.....let's sue them immediately, and embarrass them in the news media. We can force them to pay us over and over and over, while the iron is hot."

-Our current administration

Anonymous said...

Just another government bank which has David Copperfield ponzi accounting. Wells Fargo management is pretty much inept. So saying this bank is the most valuable is kind of scary. Just wait until all the sub prime car loans they have been making roll in.

If you want to know how the stock price got so high the government through their ZIRP interest rate policy allows the big government banks to borrow money at near 0% and then the big banks buy each others stock. If the financial stocks do not go up the US stock market does not go up.

Anonymous said...

Of course they are! They pay next to nothing to depositors. Every time I open my statement I bust out laughing at the few cents paid on thousands of dollars. That's why I am moving a lot of it OUT shortly. They are all about fees and hard-sell tactics at the teller window. I sure do miss Wachovia!

Anonymous said...

Wells Fargo is headquartered in the the administration's all time fav left coast world class city San Francisco. Holder would never shake down and extort hundreds of billions in phony Fed lawsuits like he does BOA headquartered in that despised deep southern fried back water border Red State Charlotte, South Carolina.

How many more Fed lawsuits will Holder continue to file to put BOA out of business?

Anonymous said...

this administration def hates anything red but the correct state is north not south

Anonymous said...

So very sad that the opinionated person above thought Charlotte was in South Carolina. Next...