Sitting on some cash after selling my home, I've been watching the stock market. It's a good time to have cash, too. Every time the market goes down, the value of my cash goes up. I've been looking at the banking and home improvement sector the closest. No matter how toxic the situation is for the banks, everyone needs one. As they fall in value, the buying looks better and better. After watching and reading the Wall Street Journal for a while, I discarded a bunch of bank stocks as losers (Citibank, Bank of America and a few others) and have started looking most closely at Wells Fargo. I just went through their report to investors and was cheered by what I found.
Wells Fargo has avoided most of the problems in their industry. Unlike some of the other big banks, WF has been making a profit all along. As I read their investor's information presentation, I could see why. Here's what they've been doing with debt consolidation loans:
- No interest-only, option ARMs or negative amortizing loans in portfolio
- Brokers, correspondents, or national advertising campaigns not used
- Full documentation and require income verification
It looks like Wells Fargo is the one best situated to take advantage of the problems and losses all across their industry. Eventually the bad investments and foreclosures will work their way out of the system and banking will regain its footing. When that dust settles, I would think that Wells Fargo will be in a much stronger position that it was when this whole mess started.
Update: I did a little searching around the blogosphere and came up with more positive reviews of WF. The White Oaks Blog mentions how WF has really improved their home mortgage process.
Over at Customer Experience Matters, a survey of banks' behaviors puts WF at the top of some lists and the bottom of none.
Over at Investment Moats, drizzt had this to say about WF:
The bank is now reaping the rewards of keeping its powder dry. The company did add $1.5 billion in the second quarter to its provisions against bad loans, but net charge-offs climbed to just an annualized 1.55% for the quarter.That was my thought exactly.
The relatively modest losses have let Wells Fargo increase its lending just as its capital-constrained competitors have pulled back.
3 comments:
This made my day. WF is our bank for everything. Boy am I glad they made wise decisions over the last few years!
Thanks,
Jane
It seemed that 10-12 years ago, WF was doing everything in their power to get customers out of their banks and get them online. I think their tactics of horrible customer service to achieve this end backfired on them as I've noticed a perceptible shift towards the better in customer service at their branch offices ove the past few years.
The bottom line rules but customer service goes a long way.
Hi! What an interesting blog! I should say that financial companies at the present time, may be very dangerous. The thing is that a large proportion of such institutions are a fraud. They are established to get money from the clients and then suddenly disappear or go bankrupt. They trick in people by offering high interest rates on the deposit accounts. It is better to give your money to a trusted company, like Wells Fargo, for example. Browse this great site www.pissedconsumer.com for customers’ reports about the company.
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