Showing posts with label citigroup. Show all posts
Showing posts with label citigroup. Show all posts
Wednesday, 27 September 2023
Saturday, 15 September 2012
The Basics of Wells Fargo
By Amanda Alix
September 13, 2012
September 13, 2012
For well-nigh 20 years now, the Motley Fool has been here to help you invest better and smarter, using spot-on analysis and razor-sharp wit. To celebrate Worldwide Invest Better Day on September 25, we're taking some time to get back to the basics -- of investing, that is. In that spirit, I have rounded up some sweet financial sector stocks that have been showing some real investing mojo lately.
Without further ado, let me introduce you to the focus of this particular article: longtime banking icon, Wells Fargo(NYSE: WFC ) .
A bank with historical perspective and a drive to succeed
Founded in 1852 in New York by Henry Wells and William Fargo, Wells Fargo & Co. provided express mail and banking services to frontier California. Originally employees of the American Express Company, the two men saw gold in their futures, and formed their own business to cater to gold miners. The first office out west was housed in San Francisco, and soon spread to other boom towns. When Wells was purchased in the late 1990s, the new owners obviously felt the tug of history, keeping the name of the company the same, and re-situated their main offices to San Francisco.
Founded in 1852 in New York by Henry Wells and William Fargo, Wells Fargo & Co. provided express mail and banking services to frontier California. Originally employees of the American Express Company, the two men saw gold in their futures, and formed their own business to cater to gold miners. The first office out west was housed in San Francisco, and soon spread to other boom towns. When Wells was purchased in the late 1990s, the new owners obviously felt the tug of history, keeping the name of the company the same, and re-situated their main offices to San Francisco.
Although the big banks have enjoyed somewhat of a rally in recent weeks, the four years since the financial crisis has definitely cramped their style. Where some have pulled back from some lucrative aspects of banking, Wells has jumped right in. As big boys Bank of America (NYSE: BAC ) , JP Morgan Chase (NYSE: JPM ) , and Citigroup (NYSE: C ) have retreated from writing mortgages in the years since the meltdown, Wells has corralled a full one-third of this market for itself. Although the bank has attracted criticism for its heavy involvement in the mortgage business from both regulators and lawmakers, Wells recently defended its position, noting that they have worked hard for their piece of the pie. Managers have even used the Old West motif at sales meetings to push for more loan business -- by dressing up as cowboys.
Wells is pushing its way into other loan markets, too. Noting the increase in housing activity, it has opened new loan offices in Bank of America’s hometown of Charlotte, North Carolina. The bank is not only ready and willing to loan to home builders, but is actively seeking out new business in the area.
Likewise, Wells has been tapped by General Motors (NYSE: GM ) to service the financing needs of GMC, Chevy, Cadillac, and Buick dealers in the western United States, causing troubled Ally Financial, which already has a relationship with GM, to shake in its boots. Spurred by this recent success, Wells is pushing GM for an even larger share of its loan business.
The bank’s Q2 report showed only a slight increase in revenues year over year, but deposits were up, and loan activity strong. In addition, Wells recently paid out a nice $0.22 per sharedividend, which shows signs of trending upwards again, after a slowdown last year.
A bank that sticks to its roots
The Wild West spirit is still part and parcel of the Wells Fargo mystique, and the drive to prosper helps explain why this bank has weathered so many storms throughout its long history, and has become a favorite of well-regarded investors, like Warren Buffett. When it comes to staying power, it’s hard to beat this company -- something that long-term investors can tip their hats to.
The Wild West spirit is still part and parcel of the Wells Fargo mystique, and the drive to prosper helps explain why this bank has weathered so many storms throughout its long history, and has become a favorite of well-regarded investors, like Warren Buffett. When it comes to staying power, it’s hard to beat this company -- something that long-term investors can tip their hats to.
Wells Fargo & Company Company Snapshot
Business Description: Wells Fargo & Company operates in the National commercial banksonline bookonline book sector. Company with three other companies in this sector in the United States: JPMorgan Chase & Co. (2011 sales of $110.91 billion of which 24% was Retail Financial Services), Bank of America Corporation ($107.24 billion of which 22% was Global Banking & Markets), and Citigroup Inc. ($103.31 billion of which 32% was Consumer Banking).
Sales Analysis. Wells Fargo & Company reported sales of $88.31 billion for the year ending December of 2011. This represents a decrease of 6.2% versus 2010, when the company's sales were $94.19 billion. Contributing to the drop in overall sales was the 7.3% decline in Community Banking, from $54.70 billion to $50.70 billion. There were also decreases in sales in Wholesale Banking (down 2.5% to $21.67 billion) . However, these declines were partially offset by the increase in sales of Wealth, Brokerage and Retirement (up 3.9% to $12.19 billion) .
Tuesday, 25 January 2011
Betting on a Turnaround: John Paulson makes $1bn betting on Citigroup recovery
John Paulson, the hedge fund manager who became a billionaire after predicting the US housing crash, has seen his fund generate $1bn betting on the recovery of US bank Citigroup.
Paulson & Co, the fund he runs in New York, made the disclosure in a letter to its investors, according to Bloomberg News. Bloomberg quotes the letter from Mr Paulson as saying that its investment in Citigroup "demonstrates the upside potential of many of the restructuring investments we have added to our porfolio and our ability to generate above-average returns in large positions".
Mr Paulson sold almost 83m shares in Citi in the third quarter of last year, according to the latest filings with the Securities and Exchange Commission, but still had 424m shares in the bank.
Though Citi's fourth-quarter results fell short of Wall Street's expectations last week, the bank returned to profit last year for the first time since being rescued with $45bn of US taxpayers in 2008. Vikram Pandit, the bank's chief executive, last week had his annual salary lifted from $1 - an amount he had pledged to take until the bank was back in the black - to $1.75m.
Mr Paulson also expects the US economic recovery to accelerate this year thanks to the extension of the tax cuts agreed on by Congress and The White House late last year, Bloomberg reported.
Sunday, 19 April 2009
Citigroup Q1 results top Wall Street forecasts
Citigroup Q1 results top Wall Street forecasts
By Madlen Read, AP Business Writer
NEW YORK — Citigroup's(C) problems are far from over, but Friday it reported its smallest quarterly loss since 2007.
The bank released first-quarter results Friday that were buoyed largely by strong revenues from bond trading, but that burst of activity is not expected to continue. And Citigroup also said it's still facing loan losses that are expected to increase throughout this year.
Citigroup became the fourth bank in a week with earnings news that pointed toward a recovery in the banking industry after the devastation caused by the mortgage and credit crisis and the recession. But the outlook for the industry is still difficult because the global recession is causing defaults in mortgages, credit cards and commercial real estate loans
Chief Financial Officer Ned Kelly said in a conference call with investors that certain consumer delinquency rates have been moderated, but he still expects loan losses to worsen before they improve.
"The elephant hasn't made its way through the python," Kelly said.
The bank posted a first-quarter loss to common shareholders of $966 million after massive loan losses and dividends to preferred stockholders. However, before paying those dividends, which were tied to the government's investment in Citigroup, the bank earned $1.6 billion.
Citigroup's results topped analyst forecasts. The company reported a loss per share of 18 cents, which was narrower than the 34 cents analysts predicted, according to Thomson Reuters. A year ago, Citigroup suffered a loss of more than $5 billion, or $1.03 a share.
Separately, Citigroup said Friday it is delaying the government's exchange of billions of dollars worth of preferred shares into common shares until the government completes its "stress test." The government has been gauging the health of U.S. banks, and the results are expected in early May.
Citigroup's revenue doubled in the first quarter from a year ago to $24.8 billion thanks to strong trading activity in its investment bank. Its credit costs were high, though — at $10 billion — due to $7.3 billion in loan losses and a $2.7 billion increase in reserves for future loan losses.
Citigroup has been the weakest of the large U.S. banks, posting quarterly losses since the fourth quarter of 2007. But in March, CEO Vikram Pandit triggered a stock market rally after he said that January and February had been profitable for Citigroup.
Citigroup's better-than-expected report on Friday came after surprisingly solid earnings from JPMorgan Chase, Goldman Sachs Group, and Wells Fargo over the past several days. While recent results from these healthier banks have brought some relief to investors, many have been waiting to see how more troubled banks such as Citigroup have fared.
Pandit said in a statement Friday that he was "pleased" with Citigroup's performance.
"While we and the industry face challenges in the coming quarters as we work through the weak economy, we will remain focused on strengthening the Citi franchise," he said.
One concern among investors is that the strong trading activity seen by banks in the first quarter was a one-time event — the first quarter saw a surge in corporate bond issuance as the credit markets started thawing from 2008's frozen fourth quarter. Even JPMorgan CEO Jamie Dimon acknowledged Thursday that trading activity is unlikely to remain so robust.
The question is whether banks like Citigroup can find other ways to offset loan losses, which nearly all economists and bankers agree will keep rising throughout the year as the unemployment rate ticks higher. The global recession is causing defaults in mortgages, credit cards and commercial real estate loans — and Citigroup is heavily exposed to all of these.
In early March, Citigroup stock hit an all-time low of 97 cents per share. It has since quadrupled, but remains down 40% for 2009. And at $4.01 a share Thursday, Citigroup stock was down 93% from its late 2006 peak.
Since late 2007, Citigroup has gotten a new CEO, a new chairman, and a new structure that splits its traditional retail and investment banking business from its consumer finance units, asset management, and risky mortgage-related assets. It's also been downsizing by selling off businesses and laying off a fifth of its employees. And it's gotten $45 billion in government funding and a federal backstop on roughly $300 billion in assets.
http://www.usatoday.com/money/companies/earnings/2009-04-17-citi_N.htm
By Madlen Read, AP Business Writer
NEW YORK — Citigroup's(C) problems are far from over, but Friday it reported its smallest quarterly loss since 2007.
The bank released first-quarter results Friday that were buoyed largely by strong revenues from bond trading, but that burst of activity is not expected to continue. And Citigroup also said it's still facing loan losses that are expected to increase throughout this year.
Citigroup became the fourth bank in a week with earnings news that pointed toward a recovery in the banking industry after the devastation caused by the mortgage and credit crisis and the recession. But the outlook for the industry is still difficult because the global recession is causing defaults in mortgages, credit cards and commercial real estate loans
Chief Financial Officer Ned Kelly said in a conference call with investors that certain consumer delinquency rates have been moderated, but he still expects loan losses to worsen before they improve.
"The elephant hasn't made its way through the python," Kelly said.
The bank posted a first-quarter loss to common shareholders of $966 million after massive loan losses and dividends to preferred stockholders. However, before paying those dividends, which were tied to the government's investment in Citigroup, the bank earned $1.6 billion.
Citigroup's results topped analyst forecasts. The company reported a loss per share of 18 cents, which was narrower than the 34 cents analysts predicted, according to Thomson Reuters. A year ago, Citigroup suffered a loss of more than $5 billion, or $1.03 a share.
Separately, Citigroup said Friday it is delaying the government's exchange of billions of dollars worth of preferred shares into common shares until the government completes its "stress test." The government has been gauging the health of U.S. banks, and the results are expected in early May.
Citigroup's revenue doubled in the first quarter from a year ago to $24.8 billion thanks to strong trading activity in its investment bank. Its credit costs were high, though — at $10 billion — due to $7.3 billion in loan losses and a $2.7 billion increase in reserves for future loan losses.
Citigroup has been the weakest of the large U.S. banks, posting quarterly losses since the fourth quarter of 2007. But in March, CEO Vikram Pandit triggered a stock market rally after he said that January and February had been profitable for Citigroup.
Citigroup's better-than-expected report on Friday came after surprisingly solid earnings from JPMorgan Chase, Goldman Sachs Group, and Wells Fargo over the past several days. While recent results from these healthier banks have brought some relief to investors, many have been waiting to see how more troubled banks such as Citigroup have fared.
Pandit said in a statement Friday that he was "pleased" with Citigroup's performance.
"While we and the industry face challenges in the coming quarters as we work through the weak economy, we will remain focused on strengthening the Citi franchise," he said.
One concern among investors is that the strong trading activity seen by banks in the first quarter was a one-time event — the first quarter saw a surge in corporate bond issuance as the credit markets started thawing from 2008's frozen fourth quarter. Even JPMorgan CEO Jamie Dimon acknowledged Thursday that trading activity is unlikely to remain so robust.
The question is whether banks like Citigroup can find other ways to offset loan losses, which nearly all economists and bankers agree will keep rising throughout the year as the unemployment rate ticks higher. The global recession is causing defaults in mortgages, credit cards and commercial real estate loans — and Citigroup is heavily exposed to all of these.
In early March, Citigroup stock hit an all-time low of 97 cents per share. It has since quadrupled, but remains down 40% for 2009. And at $4.01 a share Thursday, Citigroup stock was down 93% from its late 2006 peak.
Since late 2007, Citigroup has gotten a new CEO, a new chairman, and a new structure that splits its traditional retail and investment banking business from its consumer finance units, asset management, and risky mortgage-related assets. It's also been downsizing by selling off businesses and laying off a fifth of its employees. And it's gotten $45 billion in government funding and a federal backstop on roughly $300 billion in assets.
http://www.usatoday.com/money/companies/earnings/2009-04-17-citi_N.htm
Thursday, 15 January 2009
Pandit: Citi undergoing "long-term transformation"
Pandit: Citi undergoing "long-term transformation"
By MADLEN READ, AP Business Writer Madlen Read, Ap Business Writer
NEW YORK – Citigroup's CEO Vikram Pandit said Wednesday that the company is going through a "long-term transformation," a day after the embattled bank sold control of its Smith Barney brokerage to Morgan Stanley.
Speculation has been growing that Pandit, who for months supported the model of Citigroup as a "universal bank," will be taking further steps to dismantle the conglomerate.
"While we are embarked on a long-term transformation of Citi, our core mission is unchanged," Pandit wrote in a memo to employees obtained by The Associated Press.
"Our goal is to streamline our operations, strengthen our balance sheet, position ourselves to take advantage of historic global growth opportunities, and deliver to clients all the benefits of our strength, insight, and unique global reach."
Analysts are expecting more details about which businesses Citigroup plans to jettison when the company releases fourth-quarter results on Friday — nearly a week earlier than originally planned.
Citigroup shares fell $1.37, or 23 percent, to $4.53 on Wednesday.
On Tuesday, Morgan Stanley and Citigroup agreed to merge their retail brokerages. Morgan Stanley is paying Citigroup $2.7 billion for a 51 percent stake in the joint venture. Citigroup will have a 49 percent stake. The new unit — Morgan Stanley Smith Barney — will have more than 20,000 advisers, $1.7 trillion in client assets; and serve 6.8 million households around the world, the companies said.
Citigroup will recognize a pretax gain of about $9.5 billion because of the deal.
http://news.yahoo.com/s/ap/20090114/ap_on_bi_ge/citigroup_ceo;_ylt=AqZ31iUOTghy9MXvY3OOhYiyBhIF
By MADLEN READ, AP Business Writer Madlen Read, Ap Business Writer
NEW YORK – Citigroup's CEO Vikram Pandit said Wednesday that the company is going through a "long-term transformation," a day after the embattled bank sold control of its Smith Barney brokerage to Morgan Stanley.
Speculation has been growing that Pandit, who for months supported the model of Citigroup as a "universal bank," will be taking further steps to dismantle the conglomerate.
"While we are embarked on a long-term transformation of Citi, our core mission is unchanged," Pandit wrote in a memo to employees obtained by The Associated Press.
"Our goal is to streamline our operations, strengthen our balance sheet, position ourselves to take advantage of historic global growth opportunities, and deliver to clients all the benefits of our strength, insight, and unique global reach."
Analysts are expecting more details about which businesses Citigroup plans to jettison when the company releases fourth-quarter results on Friday — nearly a week earlier than originally planned.
Citigroup shares fell $1.37, or 23 percent, to $4.53 on Wednesday.
On Tuesday, Morgan Stanley and Citigroup agreed to merge their retail brokerages. Morgan Stanley is paying Citigroup $2.7 billion for a 51 percent stake in the joint venture. Citigroup will have a 49 percent stake. The new unit — Morgan Stanley Smith Barney — will have more than 20,000 advisers, $1.7 trillion in client assets; and serve 6.8 million households around the world, the companies said.
Citigroup will recognize a pretax gain of about $9.5 billion because of the deal.
http://news.yahoo.com/s/ap/20090114/ap_on_bi_ge/citigroup_ceo;_ylt=AqZ31iUOTghy9MXvY3OOhYiyBhIF
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