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The Zacks Analyst Blog Highlights: Wells Fargo, Bank of America, JPMorgan Chase, Capital One Financial and Citigroup

WFC BAC JPM COF C

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For Immediate Release

Chicago, IL – October 10, 2016 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Wells Fargo & Company (NYSE: (WFC - Free Report) -Free Report ), Bank of America Corp. (NYSE: (BAC - Free Report) -Free Report ), JPMorgan Chase & Co. (NYSE: (JPM - Free Report) -Free Report ), Capital One Financial Corp. (NYSE: (COF - Free Report) -Free Report ) and Citigroup Inc. (NYSE: (C - Free Report) -Free Report ).

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Here are highlights from Friday’s Analyst Blog:

Bank Stock Roundup

Over the last five trading days, banking stocks witnessed some recovery. Though Wells Fargo & Company (NYSE: (WFC - Free Report) -Free Report ) was in focus for its wrongdoings, it seems that the gradually improving operating environment encouraged the investors.


Banks have been expanding their market share and revenue sources through acquisitions as low-rate environment is not expected to reverse anytime soon. Also, the ongoing economic recovery is expected to lead to a rise in demand for loans, thereby supporting top line to some extent.

Further, over the last five trading sessions, big banks, including Wells Fargo, Bank of America Corp. (NYSE: (BAC - Free Report) -Free Report ) and JPMorgan Chase & Co. (NYSE: (JPM - Free Report) -Free Report ) submitted their revised ‘Living Wills’ to the banking regulators, the Federal Reserve and the Federal Deposit Insurance Corp. (“FDIC”). This indicates that these banks have rectified the problems identified by the regulators in April.

In addition, resolution of litigations and probes related to legacy matters and business misconducts dominated the banking space, as usual.

Banks - Major Regional Industry Price Index

(Read: Bank Stock Roundup for the week ending Sep 16, 2016 )

Important Developments of the Week

1. Wells Fargo, that once earned admiration for steering well through the onslaughts of the 2008 financial meltdown, seems to face a bigger crisis now, following its sales scandal which cropped last month. In the latest fallout from the scam, the state of Illinois has suspended $30 billion in investment activity with the bank for “predatory and illegal banking practices” (read more: Wells Fargo Loses Illinois State Business in Latest Setback ).

Further, the Chicago City Council, with support from Mayor Rahm Emanuel, agreed to suspend business relations with Wells Fargo. Hence, the company will be prohibited from receiving city deposits, underwriting bond issues and brokering services on the city’s behalf. Also, it would be disallowed from serving as a financial advisor or a trustee in any loan or redevelopment agreement (read more: Wells Fargo Suspended by Chicago over Sales Scam )

Additionally, Wells Fargo’s credit outlook has been cut from ‘Stable’ to ‘Negative’ by Fitch Ratings Inc. The rating agency stated that the cut highlights the potential damage to the bank’s reputation and earnings profile owing to recent regulatory actions and fines (read more: Fitch Cuts Wells Fargo's Outlook to Negative, Affirms Rating ).

2. In other news pertaining to Wells Fargo, the company announced closure of deal to acquire the Europe, Middle East and Africa (EMEA) segment of GE Capital’s Commercial Distribution Finance (CDF) business. Nine offices and 163 team members in markets across Europe, including Belgium, Finland, France and Germany, will join the company (read more: Wells Fargo Closes Purchase of GE's CDF Business in EMEA ).

3. Capital One Financial Corp. (NYSE: (COF - Free Report) -Free Report ) has entered into a definitive agreement to acquire the credit card operations from Cabela's Inc. This acquisition will include about $5.2 billion in credit card receivables and other assets, and around $5 billion in related funding liabilities. Notably, the credit card operations will be obtained for par value of the credit card receivables, less the par value of assumed liabilities (read more: Capital One to Acquire Credit Card Operations of Cabela's ).

4. Citigroup Inc. (NYSE: (C - Free Report) -Free Report ) has announced its plans of investing more than $1 billion in its Mexican unit, Banco Nacional de México or Banamex, which will be renamed as Citibanamex. The investment is expected to be completed by 2020 and will improve digital tools, ATMs and branches (read more: Citigroup to Invest $1B More in Mexican Unit ).

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