Research archive for WFC

On Friday last week, before the US market opened, Wells Fargo reported their 3Q numbers. Whenever I read their results, I am amazed at their size and the size of the US economy as a whole. Here are some of the massive numbers, for reference bear in mind that South Africa's GDP last year was $295 billion. Over the previous quarter, they had applications for $73 billion in home loans, $59 billion were approved. Over the period, the average deposits in the bank were $1.3 trillion and the average outstanding loans were $952 billion. Shifting to the Wealth and Investment Management division, it had $1.9 trillion in assets! When people talk about the most prominent asset managers, Wells Fargo is never mentioned, even though there are only a handful of firms with over $1 trillion in assets.

Wells Fargo reported numbers Friday, before the market opened, here is the news filing - Wells Fargo Reports $5.8 Billion In Quarterly Net Income. Revenues of 22.2 billion Dollars produced net income of 5.8 billion Dollars, diluted earnings per share clocked 107 US cents, up 6 percent from the prior reporting period. Total average loans grew only a percent to just shy of 957 billion Dollars, what is more interesting is that net deposits grew 5 percent to 1.3 trillion Dollars.

Wells Fargo reported numbers last week. At the same time, Berkshire, the biggest shareholder, sold down shares to below 10 percent. Reason being is in part that the shares in issue have reduced, as a result of buybacks from the company. Fewer Wells shares in issue means higher holding by Berkshire, as they are not a seller. Regulations then forced Berkshire to sell down its position. The numbers themselves were OK. The company of course has been in the news for all the wrong reasons, recent executive clawbacks of shares are a step in the right direction of normalising the behaviour of the staffers in question. Of course the stink associated with the scandal meant that the chief was axed and the board moved swiftly to restore credibility.

Wells Fargo reported FY numbers, equally also for the fourth quarter. The bank has been rocked by scandals last year, fake accounts opened on behalf of unwitting customers. It is a massive institution, 1 in 3 households in the US have a banking relationship with Wells Fargo. The company has been in the same headquarters since 1852, one of the few businesses to have the same name, the same headquarters for over 150 years. Of course they were supposed to be immune to scandals, this is one of Berkshire's largest holdings, and that investment house has a pretty long and proud record.

Three major banking stocks reported their results on Friday, Citi and JP Morgan first, and then the one that we are most interested in, Wells Fargo had numbers. Now Wells have had more than a tough time lately, the fall out from the ghosting accounts and very unsavoury practice of created unknown accounts (for the client) in order to earn commissions, has resulted in a large shedding of the workforce and more importantly, the eventual ejection of the CEO and chair, see Stumpf steps down.

And then no doubt the biggest market news of the day, received after market. CEO and Chairman of Wells Fargo, John Stumpf is resigning. The stock has popped nearly two percent in the aftermarket. The company has a news release: Wells Fargo Chairman, CEO John Stumpf Retires; Board of Directors Elects Tim Sloan CEO. Immediate. Stumpf leaves to spend more time with his money. Although, as the filings report, he is not going to receive a severance package of any sort. He will still retain all of his stock, pension and other benefits.

Wells Fargo reported 2Q numbers (and first half) before the market opened Friday. This is our one and only banking stock, globally in fact. We do of course own Discovery in our local portfolios and that is morphing into a bank, it is not even a secret. Wells Fargo is a company that morphed from being originally a stagecoach (the logo) delivery business to becoming a money transfer business, to one of the biggest banks by assets in the world. By the last read that I could find from the Federal Reserve (banks ranked by consolidated assets, March 2016), only JP Morgan is "bigger". Most of Wells assets, 97 percent of them, are in the USA. 267 odd thousand employees work there, including a little over 15 thousand financial advisors. Wow, that is a LOT of people at over 6000 branches.

As promised here is some commentary on Wells Fargo's 1Q numbers which came out yesterday before the market opened. The numbers beat expectations but were lower than last year this time, the end result on the stock price was a 0.5% decline. A quick run down of the important numbers, Revenues were $22.2 billion, resulting in a profit of $5.46 billion and a diluted earnings per share of 99c (last year they were $1.03 per share). Part of the reason for the drop in profits is due to an increase in credit loss provisions from $608 million to $1.09 billion and the $1.2 billion fine we spoke about on Monday.

Wells Fargo reported numbers last Friday, before the bell, in amongst all the bedlam (strictly speaking that word is derogatory) we have pushed the results reporting (from our side) a little out. I read their now old 2014 annual report and then their Full year and fourth quarter numbers yesterday in more detail. At face value the numbers I guess are uninspiring, for the full year for 2015 earnings and revenues grew by very low single digits, barely at all.

Yesterday we had numbers out of the US's biggest bank by mortgage assets, Wells Fargo. As far as banks go this is one of the most boring out there, no big line items for fines, lawyer costs and trading loses. The result is the company chugs along, growing revenue and profits one quarter at a time.

Last week we had the second quarter results from Wells Fargo, who you will probably know as one of Buffett's "Big Four stocks". Berkshire Hathaway owns nearly 10% of the company which currently has a market cap of $299 billion. Here is where it ranked in size at the end of last year: