Author Topic: WFC - Wells Fargo  (Read 382345 times)

vinod1

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Re: WFC - Wells Fargo
« Reply #990 on: June 17, 2019, 07:22:58 PM »
The board should be looking for a competent CEO who is

- female
- minority black/native american/etc
- preferably with some uplifting story
- bonus: a recent personal tragedy

The CEO would be untouchable and it solves the real problem WFC faces.

Vinod

Vinod, I just have to ask :

Are you serious here?

No! A failed attempt at satire :)

Vinod
The fundamental algorithm of life: repeat what works. –Charlie Munger


rranjan

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Re: WFC - Wells Fargo
« Reply #991 on: June 17, 2019, 09:55:12 PM »
The board should be looking for a competent CEO who is

- female
- minority black/native american/etc
- preferably with some uplifting story
- bonus: a recent personal tragedy

The CEO would be untouchable and it solves the real problem WFC faces.

Vinod

Vinod, I just have to ask :

Are you serious here?

No! A failed attempt at satire :)

Vinod

Nah, it wasn't a failed attempt.

Mephistopheles

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Re: WFC - Wells Fargo
« Reply #992 on: June 18, 2019, 05:34:23 AM »
Vinod, I thought it was hilarious :D

(Not a failed attempt)

koshigoe

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Re: WFC - Wells Fargo
« Reply #993 on: June 21, 2019, 09:47:12 PM »
based on today's results, wfc still has enormous capital even considering the severely adverse scenario.

also, I think this is not nearly factored into the price -> the next stress tests will have varied capital buffer based on previous years estimated losses, and wfc enormous winner here (see chart in linked article below). I think capital returns at wfc will be higher than anticipated in next few years, they have way too much capital and will benefit hugely from subsequent stress tests.

https://www.wsj.com/articles/a-new-source-of-stress-for-banks-11560942000

coc

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Re: WFC - Wells Fargo
« Reply #994 on: June 22, 2019, 11:14:26 AM »
based on today's results, wfc still has enormous capital even considering the severely adverse scenario.

also, I think this is not nearly factored into the price -> the next stress tests will have varied capital buffer based on previous years estimated losses, and wfc enormous winner here (see chart in linked article below). I think capital returns at wfc will be higher than anticipated in next few years, they have way too much capital and will benefit hugely from subsequent stress tests.

https://www.wsj.com/articles/a-new-source-of-stress-for-banks-11560942000

Excellent point. The Fed is being very tough on trading operations.

no_free_lunch

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Re: WFC - Wells Fargo
« Reply #995 on: June 22, 2019, 08:02:21 PM »
based on today's results, wfc still has enormous capital even considering the severely adverse scenario.

also, I think this is not nearly factored into the price -> the next stress tests will have varied capital buffer based on previous years estimated losses, and wfc enormous winner here (see chart in linked article below). I think capital returns at wfc will be higher than anticipated in next few years, they have way too much capital and will benefit hugely from subsequent stress tests.

https://www.wsj.com/articles/a-new-source-of-stress-for-banks-11560942000

Excellent point. The Fed is being very tough on trading operations.

If the stress test goes well, is it possible that WFC and the other mega cap banks will start making more acquisitions?  That is my concern that they will start trying to grow.  The smaller banks are not as low cost as the big ones so there is probably a way that they could bid companies up, shed costs and come out ahead.  That's what was happening back before the GFC.  I don't have the numbers but it seems there is much less M&A now.  Is it possible banking M&A will start to kick in more next year?

coc

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Re: WFC - Wells Fargo
« Reply #996 on: June 23, 2019, 06:00:11 AM »

If the stress test goes well, is it possible that WFC and the other mega cap banks will start making more acquisitions?  That is my concern that they will start trying to grow.  The smaller banks are not as low cost as the big ones so there is probably a way that they could bid companies up, shed costs and come out ahead.  That's what was happening back before the GFC.  I don't have the numbers but it seems there is much less M&A now.  Is it possible banking M&A will start to kick in more next year?

The problem is that any bank, Wells included, can’t acquire deposits if they already have 10% market share.

John Hjorth

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Re: WFC - Wells Fargo
« Reply #997 on: June 27, 2019, 03:11:06 PM »
Wells Fargo & Co. [June 27th 2019] : Wells Fargo Receives No Objection to its 2019 Capital Plan.

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As part of the plan, the Company expects to increase its third quarter 2019 common stock dividend to $0.51 per share from $0.45 per share, subject to approval by the Company’s Board of Directors. The plan also includes common stock repurchases of up to $23.1 billion for the four-quarter period (third quarter 2019 through second quarter 2020). In addition, the Company may consider redemptions or repurchases of other capital securities as part of the plan.
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cameronfen

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Re: WFC - Wells Fargo
« Reply #998 on: June 27, 2019, 03:51:56 PM »
So I dont know much about WFC in particular, esp regarding over capitalization/and or undererningbon assets, but there is serious disruption coming for the big banks.  I know this was sort of mentioned before, but the head of GS' Marcus said this about incumbent banks: "There are two kinds of incumbent banks: There are banks that are screwed, and there are banks that don’t know they’re screwed."  (https://www.google.com/amp/s/www.bloomberg.com/amp/news/articles/2019-06-20/goldman-sachs-executive-says-legacy-retail-banks-are-screwed)

As other people have said this fact is starting to dawn on WFC executives, but they are probably the least prepared out of the big banks.  You might makes some returns due to undervaluation and financial engineering of the balance sheet, but I dont know if this is going to be a moaty business long term. 

They have a worse cost structure on the deposit gathering side than branch free banks.  On the asset side, peer to peer lending is a better business especially the market place owner which would be their direct competitor.  On the transactions side something like Paypal without going through a credit card like Venmo or Alipay, which is what Libra will be (we'll see if it works) is lower fees for merchants by a healthy margin and just as good for consumers.  You have robo advisers, remmitence companies, low cost brokerages....  Community banking business will be in trouble in the future imo, wholesale banking may follow soon after.  I think investment banking is the safest from disruption but thats only 20% of the business. 

Jurgis

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Re: WFC - Wells Fargo
« Reply #999 on: June 27, 2019, 04:01:53 PM »
GS/Marcus/Dell is just talking their own book.
At least Bloomberg journalist is not completely gaga:

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Retail banks aren’t dying just yet. The KBW Bank Index has posted more than double the return of Goldman Sachs’s shares over the past five years.
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