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Provided it kept costs in line and has no bad surprises to announce Friday, Wells Fargo could steal some of the glow normally monopolized by JPMorgan Chase during earnings season.
July 9 -
EverBank this week was the latest buyer to take advantage of the ripening market for books of commercial and other types of credits. Wells Fargo, City National and others have announced similar moves.
July 3 -
Wells Fargo (WFC) has agreed to buy a subscription finance portfolio with $6 billion in commitments from WestLB, European commercial bank based in Germany.
June 25 -
The deal would give Wells an entrée into prime brokerage and continues its niche M&A strategy.
April 27
Wells Fargo (WFC) intends to keep looking to acquire loans after completing deals for $6.9 billion in energy and subscription finance credits from European banks during the second quarter.
"I think the market continues to provide opportunities for firms that have the liquidity and the capital to take advantage of them," Timothy Sloan, the San Francisco company's chief financial officer, said in a Friday conference call discussing quarterly results.
"Whether or not we'll be successful I certainly can't promise you because we turn down more than we pursue," he added.
The company's purchases of BNP Paribas' North American energy lending arm in April and WestLB's subscription finance portfolio in June have "worked out well, and we look forward to looking at more" deals, Sloan said.
The BNP energy deal transferred about $3.7 billion of loans and nearly $9.4 billion in loan commitments.
Wells has the drive to pursue more acquisitions, but no mandate, said John Stumpf, the $1.3 trillion-asset company's chairman and chief executive, during the call.
"We kick a lot of tires. We say no to more stuff than we say yes to," Stumpf said. "If we don't do another deal … we'll do other things. But we're still looking at a lot of things."
The portfolio acquisitions were particularly beneficial for Wells' wholesale banking unit, where loans grew 1% from the first quarter and 11% from a year earlier, to $270.2 billion.
Wells said that yields on the acquired loans matched the yields on its existing loans, which helped preserve margins in wholesale banking, which houses the corporate, commercial, equipment, and government banking operations, among others.
The wholesale segment earned $1.88 billion in the quarter, or about one percent less than in the preceding quarter and 1.7% less than a year earlier.
Wells' overall profits rose 8.7% from the first quarter and 17% from a year earlier, to $4.62 billion.
Wells, restricted by its vast size from buying any more U.S. deposits, has aggressively sought up to bulk up via acquisitions of specialty lenders, insurance brokerages and asset managers. The company's
