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Wells Fargo Finance Chief Says Company Less Risky Than Others

Wells Fargo Finance Chief Says Company Less Risky Than Others

Timothy Sloan, the CFO of Wells Fargo, recently told a group of investors in New York that his company was less risky than other banks, particularly in light of the recent debacle reported by JPMorgan.

According to Dow Jones Newswires, Sloan said "you can't take outsized risk in the financial services industry," adding that Wells Fargo has significantly lowered its exposure to credit-default swaps in the last three years.

"Credit default swaps are in the news," Sloan explained. "Three years (ago) our credit default swaps (were) much too large, and it is now about a quarter of what it was three years ago."

The news source reports Sloan also raised return targets for the bank, with the goal to eventually receive as much as 1.6 percent return on assets when the economy is once again healthy. The finance chief noted that the bank is confident it can bring expenses down to a necessary level.

Reuters reports Wells Fargo posted a 1.3 percent return on assets and a 12.14 percent return on equity during the first quarter.

Comments

david waltz
Title: Assistant Treasurer
Company: Integrys Energy Group
(Assistant Treasurer, Integrys Energy Group) |

For anyone interested in the pricing of Credit Default Swaps, I wrote a 3-part series of blog posts on this topic at the time of JPMorgans news announcement. The link to the first post is here:

http://treasurycafe.blogspot.com/2012/05/into-belly-of-whale-hedging-and-credit.html

Thanks!

david k waltz