-
WASHINGTON — Sen. Dick Durbin is calling on Wells Fargo to explain why it needs to impose new debit card fees when it posted a 21% increase in third quarter profits.
October 19 -
Beneath the San Francisco bank's higher profits lie lower net interest margins, thanks in part to a double-digit increase in deposits.
October 17 -
Funding costs at large institutions with big proportions of time deposits have been closing in on funding costs at peers, and maturing certificates of deposit are set to continue to buffer net interest margins.
September 26 -
The government faces significant obstacles in enacting a plan to turn government-controlled foreclosure properties into rental housing, including the exact goals of such a program and its structure.
September 16
Wells Fargo & Co.'s chief executive, John Stumpf, has a pretty clear message for those who think Wells should slam on the brakes of its rapid deposit growth — go jump in a lake.
Wells' profit margins
Stumpf, speaking to the Atlanta Press Club on Monday, said Wells wants to add as much in new deposits as possible.
"If you were short term in your thinking, you could make that argument," that Wells took too many deposits, said Stumpf, who was in Atlanta in advance of a quarterly meeting of the Wells board of directors. The meeting will be held Tuesday at an undisclosed location in the city.
"We're long-term thinkers and bringing on new relationships that happen to come with deposits. Fantastic. We'll take all those we can take, even if it makes short-term results more challenging," Stumpf said.
Wells' core deposits rose 14% from the second quarter, and 8% from a year earlier, to $836.8 billion in the third quarter. Wells' net interest margin fell to 3.8% in the third quarter from 4% in the second quarter, and Chief Financial Officer Tim Sloan, during a conference call last week, attributed Wells' lower net interest margin to Wells' "outsized deposit growth" in the quarter.
During a question-and-answer session at the press club event, Stumpf discussed the company's decision to test
"A checking account costs us about $200 to $300 a year to monitor," Stumpf said. "Customers can come in our stores to our tellers and use our teller line for free. Our ATMs are available to our customers at no cost. We have free online, free bill-pay. If someone uses their debit card or credit card and it's unauthorized usage, we take the hit. All those things are in a value package. Most of our customers pay for that value by doing more business with us."
Wells is gauging customers' opinions of the debit-card fee, and at the tests' conclusion, "we'll find that sweet spot so we can continue to grow," Stumpf said.
In another brief discussion, Stumpf said he endorses a proposal to shift millions of foreclosed homes into
After Stumpf was introduced by one of his Atlanta customers, IntercontinentalExchange Inc. Chairman and Chief Executive Jeffrey C. Sprecher (who noted that Wells has "helped us all through the economic downturn, at increasingly more sophisticated and higher levels of capital"), Stumpf mentioned Wells' connections to Atlanta.
A predecessor bank in the state was First Atlanta, which was founded in 1865 and later was merged into Wachovia Corp., which Wells acquired in 2008, he explained
Wells inherited, as part of the Wachovia deal, some prime signage rights along the merged interstate highways that run through downtown Atlanta. The "Wells Fargo" name, in large yellow letters, sits atop an office tower in the Atlantic Station mixed-use retail and office development.
"This is the third-largest market we have in the company, and we do business in all 50 states," Stumpf said.
"But it has the biggest sign, the No. 1 sign. Thank goodness, whoever did the Atlantic Station sign, that's No. 1."
