Wells Fargo CEO: We’re Pushing 30% of Profits to Our Dividend
Wells Fargo (NYSE:WFC) CEO John Stumpf said Thursday that the bank is anxious to return capital to shareholders and plans to devote 30 percent of its earnings toward a dividend and initiate share buybacks.
Speaking the Citi Financial Services (NYSE:C) conference, Stumpf also said it was unlikely the bank would make more acquisitions of big, deposit-based institutions because Wells Fargo is close to the 10 percent deposit cap already. Under current regulations, no bank is allowed to hold more than 10 percent of all US deposits.
The San Francisco based bank is interested in expanding through acquistions is insurance and wealth management, Stumpt said. He noted that while Wells Fargo holds almost 10% of the deposits in the country, but only 2% of the wealth.
Stumpf also answered questions about the mortgage crisis. Asked about how he felt about a proposal being circulated by fifty state attorney generals to forgive a portion of a deliquent homeowners’ principal, Stumpf said as a broad based solution it would create inequity.
Stumpf asked why a homeowner who is underwater and deliquent on their mortgage payments, get principal forgiven when a neighbor who may also be underwater but current on their payments, could not. He said it could incentivize homeowners who are underwater and current, to become deliquent on their loans in order to reduce the principal they owe.