The Banking and Strategy Initiative

Chillin' out till it needs to be funded

Bank Results Season: Wells Fargo plays follow the leader to assert dominance (Net Income $5.5 Bln in Q2 2013)

Even as trading rich investment banks like Goldman Sachs and JP Morgan survived without a scratch as competition from the Bank of America and Morgan Stanley was vanquished, Wells Fargo continued its new practice of reporting alongside JP Morgan with its dominant share of the mortgage markets continuing for now and margins kept receding under challenging market conditions. Diluted EPS rose 20% from year ago to still lie barely under $1 while efficiency ratio for the bank improved in time to a respectable 57% and ROA improved from a pretty good 1.4% to 1.55% driven perceptibly higher after strained cost efficiency efforts bore fruit and ROE s an industry leading 14%. Tier I Common for the Bank at $117 Bln compares to $140Bln plus at JP Morgan and is a Basel 3  rules 8.54%

Revenues did not grow much at $21.3 bln and Net income added to an equally record breaking $5.2 Bln in Q1 at $5.5 Bln for Q2 The bank avers the Capital ratio was adversely impacted 24 asis points by the Mid May move in interest rates (May 21) NII imroved to $10.8 bln from the AFS portfolio accretion while the bank caught up on MBS portfolios with purchases of $21 B and added a days revenus in Interest fields in this quarter

Non Interest income was better in trust and fee income lease and retail bank charges on deposits and cards, the bank’s core income outside mortgages

Residential Originations jotted an uptick at $112 bln. Unrealised securities gains disclosed by the bank show a depletion of more than 505 due to the Treasuries move to $5 Bln from over $11 Bln

The bank also reported more tabular formats like at its Park avenue “neighbour” perhaps influenced by our following ;0)


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This entry was posted on July 12, 2013 by in Financial Markets and tagged , , , , , , .


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