Tue, May 22, 2012
China to boost private energy investment to bolster economy
By Pete Sweeney and Langi Chiang
SHANGHAI/BEIJING (Reuters) - China signaled on Wednesday it wanted to ramp up private investment in its energy sector ...
Tue, May 22, 2012
China to buy over 2,500 planes in 5 years to 2015: Xinhua
BEIJING (Reuters) - China plans to buy more than 2,500 commercial aircraft from 2011 to 2015, bringing the country's total fleet size to ...
Tue, May 22, 2012
World Bank cuts China forecast, urges measured policy
By Koh Gui Qing
BEIJING (Reuters) - The World Bank cut its economic growth forecast for China this year to 8.2 percent on Wednesday ...
Tue, May 22, 2012
Golden age or bubble? Plane-makers walk the line
By Kyle Peterson
CHICAGO (Reuters) - From a chilly perch in Burnsville, Minnesota, Tim Zemanovic has an usual perspective on the global aircraft market, which ...
Tue, May 22, 2012
Barclays to sell BlackRock stake at a discount
(Reuters) - British bank Barclays
Tue, May 22, 2012
U.S. SEC dealt blow in financial-crisis case
By Aruna Viswanatha
WASHINGTON (Reuters) - The U.S. Securities and Exchange Commission was dealt a setback in its cases tied to the financial collapse ...
Tue, May 22, 2012
Nasdaq shareholders mum on Facebook IPO
By John McCrank
NEW YORK (Reuters) - Not a single shareholder asked a question at Nasdaq OMX's annual meeting on Tuesday, just days after ...
Tue, May 22, 2012
Facebook IPO shows galactic divide between investors
By Lauren Young
NEW YORK (Reuters) - It's no surprise to anyone that big investors get preferential treatment on Wall Street.
Investors expressed disappointment ...
Tue, May 22, 2012
Wells Fargo highlights risk management
By Rick Rothacker
(Reuters) - Wells Fargo & Co
The fourth-largest U.S. bank by assets also raised its return on assets target during an investor day for analysts, even as executives repeatedly stressed their focus on carefully managing risks in the bank's operations.
"You can't take out-sized risk in the financial services industry, and we do our best not to do it," Chief Financial Officer Tim Sloan said during a day of presentations by top executives in New York.
The San Francisco-based bank has emerged from the financial crisis as one of the strongest in the United States. But analysts posed questions about its securities portfolio and its investment banking ambitions following JPMorgan's trading blunder.
Wells Fargo does not do any "centrally directed macro portfolio hedges," Chief Risk Officer Mike Loughlin said in response to an analyst's question. The bank also does not run its $230 billion securities portfolio like a business line. Instead it uses these investments to balance the bank's risk from interest rate changes, said Treasurer Paul Ackerman.
Teams led by Sloan and wholesale banking head Dave Hoyt manage Wells Fargo's securities portfolio, spokeswoman Mary Eshet said.
Bank of America
As another example of Wells Fargo's attention to risk, Sloan said the bank's credit default swaps portfolio grew too large three years ago, but has now been reduced to about a quarter of its original size. JPMorgan's trading strategy involved credit default swaps, a kind of derivative that was at the center of the 2008 financial crisis.
Wells Fargo aims for a return on assets of 1.3 to 1.6 percent, depending on the economic and regulatory environment, Sloan said. That top range exceeds the 1.5 percent target the bank laid out in 2010 and compares with a 1.31 percent ratio in the first quarter of this year.
Banks lately have been struggling to boost revenue at a time of weak loan demand and tight lending margins.
OPEN TO MORE DEALS
After expanding to the East Coast with its 2008 purchase of Wachovia Corp, Wells stepped back from doing acquisitions as it merged operations. But since the second quarter of last year, it has completed or agreed to seven deals to buy loan portfolios, business units or other companies.
Chief Executive John Stumpf said the bank does not have to do any acquisitions, but is interested in the right opportunities, including insurance firms, wealth management firms and more loan portfolios.
In its latest deal, the bank agreed to buy a prime brokerage firm, allowing it to offer clearing and other services to hedge funds for the first time.
In a question-and-answer session, NAB Research analyst Nancy Bush said the purchase of Merlin Securities set off a "tremble" among investors and asked how big the bank needs to be in the capital markets business. Stumpf said the bank's goal is to be able provide a broad array of services to corporate customers with which it has deep relationships.
In another presentation, community banking head Carrie Tolstedt said Wells plans to open more branches, a contrast to Bank of America, which is closing and selling branches. Wells has more than 6,200 U.S. branches, the most of any U.S. bank.
The bank is also rolling out new technology to speed service and cut costs, Tolstedt said. Touchscreen pads in teller lines will allow customers to receive receipts via email and to transfer funds, she said.
Mortgage head Mike Heid said the bank has options for reducing the negative impact mortgage servicing rights -- the right to collect payments from borrowers -- can have on its capital ratios under the new international standards called Basel III. The bank is looking at creating a market for selling these rights, while retaining the ability to collect payments. Some real estate investment trusts have expressed interest in the idea, Heid said.
Wells Fargo shares closed up .86 percent at $31.67 on Tuesday. The shares have climbed about 15 percent this year, better than the 11 percent increase in the KBW Bank Index <.BKX>.
(Reporting By Rick Rothacker in Charlotte, North Carolina; Editing by Gerald E. McCormick, John Wallace, Matthew Lewis and Leslie Gevirtz)
Tue, May 22, 2012
Yahoo under Levinsohn seen shifting to content, advertising
By Joseph Menn
SAN FRANCISCO (Reuters) - With two of its most distracting conflicts resolved in the past week and a half, Yahoo Inc hopes ...
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