Wells Fargo to Funnel 30% of Earnings Into Stock Dividend
Wells Fargo to Funnel 30% of Earnings Into Stock
Dividend
Wells Fargo CEO John Stumpf said on Thursday the bank is preparing to return some capital to its shareholders, initiating a new round of share buybacks and funneling 30 percent of its earnings into a shareholder dividend. Stumpf also noted, while speaking at the Citibank Financial Services conference on Thursday, that the bank would not be making any more acquisitions of large deposit-based banks as it is already close to the 10 percent deposit cap allowed under current US banking regulations.
Like other large US banks, Wells Fargo is awaiting regulatory approval to restore dividend payments for shareholders, which regulators disallowed at the height of the nation's financial crisis. San Francisco-based Wells Fargo, Stumpf noted, is looking into expansion via insurance and wealth management. He explained that while Wells currently holds nearly 10 percent of deposits in the US, it only holds 2 percent of its wealth.
Stumpf also fielded a series of questions about the mortgage crisis, saying that a proposed settlement to the foreclosure probe to write-down loan principals would create inequity. He explained that such a system, which would ostensibly reward homeowners who are behind on payments, would encourage those who are current on payments but underwater on their mortgage to intentionally fall behind so that they could receive a reduction in principal.
Wells Fargo CEO John Stumpf said on Thursday the bank is preparing to return some capital to its shareholders, initiating a new round of share buybacks and funneling 30 percent of its earnings into a shareholder dividend. Stumpf also noted, while speaking at the Citibank Financial Services conference on Thursday, that the bank would not be making any more acquisitions of large deposit-based banks as it is already close to the 10 percent deposit cap allowed under current US banking regulations.
Like other large US banks, Wells Fargo is awaiting regulatory approval to restore dividend payments for shareholders, which regulators disallowed at the height of the nation's financial crisis. San Francisco-based Wells Fargo, Stumpf noted, is looking into expansion via insurance and wealth management. He explained that while Wells currently holds nearly 10 percent of deposits in the US, it only holds 2 percent of its wealth.
Stumpf also fielded a series of questions about the mortgage crisis, saying that a proposed settlement to the foreclosure probe to write-down loan principals would create inequity. He explained that such a system, which would ostensibly reward homeowners who are behind on payments, would encourage those who are current on payments but underwater on their mortgage to intentionally fall behind so that they could receive a reduction in principal.
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