Make Profit on Banking Crisis: Wells Fargo
Wells Fargo stocks are trading 22% off their February highs. The bank has no liquidity issues associated with Silicon Valley Bank (SVB), but has some issues with deposit sourcing as it has to pay more for deposits amid rising interest rates. The deposit rate rose to 0.46%, or 32 basis points during Q4 2022. However, Net Interest Income (NII) rose to $13.4 billion in Q4 2022, and is expected to add another 10% during 2023. The bank has HTM assets at $294 billion and AFS assets at $103 billion. WFC has $127 billion in cash on its balance, giving it room to maneuver in case its clients begin to panic. However, such a scenario is highly unlikely as the bank is very popular among Americans that hold their savings in SVB and Signature Bank, another troubled institution. Wells Fargo forecasts EPS at $5.2 by 2024. So, its shares are seen to be attractive, considering its current prices.
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