BofA, JPMorgan, Citigroup
The lender is the last of the four largest U.S. banks to report second-quarter results. The biggest, Bank of America Corp., reported an $8.83 billion loss today on costs tied to defective mortgages. No. 2 JPMorgan Chase & Co. said last week that profit rose 13 percent to $5.43 billion as revenue unexpectedly climbed on gains from underwriting stocks and bonds. Citigroup Inc., the third-biggest, said profit surged 24 percent to $3.34 billion on higher investment-banking fees.
The four lenders, along with Ally Financial Inc., are in advanced talks with state attorneys general and federal regulators over deficiencies in their mortgage-servicing operations. The companies face penalties that may exceed $20 billion, two people familiar with the negotiations have said.
Wells Fargo may be forced to hold less capital than competitors after global central banks agreed last month to levy extra capital rules for lenders whose size or systemic importance means their failure could cause another financial crisis. Marquardt, who recommends that investors buy the stock, said the new rules will be "less burdensome" for the lender than rivals such as New York-based JPMorgan.