The San Francisco Chronicle reports that not only is Wells Fargo & Co. (NYSE: WFC) surviving the chaos on Wall Street, but it just may be thriving. About the only reason that Wells Fargo has been in the news recently is as a potential buyer of Washington Mutual (NYSE: WM). In fact, as markets tumbled early in the week, Wells Fargo shares reached a new 52-week high of $44.69.
Industry observers say that Wells Fargo's stability is a consequence of its limited exposure to failing mortgages, particularly of the subprime variety. It hasn't escaped unscathed, however. It said it would take charges in the third quarter related to investments in Fannie Mae (NYSE: FNM), Freddie Mac (NYSE: FRE), and Lehman Brothers, but much less than those taken by rivals Wachovia (NYSE: WB) and Washington Mutual.
Wells Fargo has been selectively acquiring assets, mostly in the western U.S., during the economic woes, and is expected to continue to do so. Chairman and former CEO, Richard Kovacevich, is rumored to me looking for one more deal before he retires later this year, according to Reuters. But both Wells Fargo and Washington Mutual have declined to comment on a possible deal. "There's going to be a lot of mergers and acquisitions for either good reasons or because people don't have choices," said Kovacevich, pointing out that Wells Fargo is not the only lender looking to buy.
Wells Fargo shares closed Friday at $39.80 and are up 31.8% year to date. Analysts surveyed by First Call recommend holding Wells Fargo.
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Reader Comments (Page 1 of 1)
9-21-2008 @ 6:26PM
william lindblad said...
I have been wrong many times before but this is one that I would not go near with a 10 foot pole. Truth in lending and truth in disclosure? In late Nov. there was shortage of signs "offered by Wells Fargo" that I personally saw. How much are these lads into the markets that are a yet?
Buy AIG and MBIA - those were offered as sound also.
HSBC too - as long as the Bank of China says so.
???????????? lots of them.
9-21-2008 @ 6:27PM
william lindblad said...
make that No shortage
9-22-2008 @ 1:21PM
gerald vaughn said...
Screw Wells Fargo and all the banks. All they want is you in debt until you die. Don't borrow any money right now. Let them suffer until rates and terms are resonable. Let the over priced retailers go under. We have the power. Stay away from AIG and Allstate they are the worst insurers I've ever dealt with. All they do is avoid paying claims.
9-21-2008 @ 11:32PM
Mrfixit said...
Buy Buy Buy, buy the bank stocks now and get rich. You wont have to worry about barrowing anymore.
9-22-2008 @ 5:24AM
BELLCORD said...
WELLS SPOKEPERSON 'BABS' BABCOCK TODAY INDICATED "..THAT BY KEEPING WITH OUR CORE BUSINESS OF LOOTING AND PILLIAGING WE'VE PRETTY MUCH AVOIDED THE FALLOUT FROM THE ' SCORCHED EARTH' POLICIES OF OUR COMPETITORS ....MS. BABCOCK DID NOT RULE OUT A LATER FORAY INTO THE EXPANDING 'RAPE AND PLUNDER' MARKET BUT SAID IT WOULD BE WITHIN WELLS FARGO GUIDELINES
9-22-2008 @ 3:03PM
rjones said...
Why is it that Wells, Auction rate securities debacle is never dicussed? They have placed there so called best customers, in these accounts that have failed, and then loan them their money at Libor plus acting like they are doing them a favor. Talking about fraud, and misrepresentation at the highest level!!
9-25-2008 @ 10:55PM
JD said...
Would someone be willing to answer this question for me. Why would it be in a Bank's best interest to let a house foreclose, rather than re-negotiate the original mortgage terms with the buyers? I would guess that it must cost banks hundreds of millions of dollars to foreclose (especially at the present magnitude of foreclosures). It would seem if the leaders of these failing banks would have been creative, and re-negotiated original home prices with the current buyers, they could have inhibited their banks from bankruptcy.