Wells Fargo is Preying on Troubled European Bank Assets
Wells Fargo (NYSE:WFC) is trying to optimize on the hardships of European banks as they’re impacted by the region’s debt crisis. Robert W. Baird & Co. said the company is “optimistic” regarding the purchase of more European bank assets. The company has already purchased loan portfolios from three Irish banks this year and is continuing to keep its sites abroad.
Bloomberg reported that, “Wells Fargo is pursuing European assets as private-equity firms and distressed investors such as Apollo Global Management LLC (NYSE:APO) and Oaktree Capital Management LP seek deals on the Continent.” Bloomberg also cited Morgan Stanley analyst Huw van Steenis who wrote a note last month estimating that European lenders may decrease their loan exposure by 1.5 trillion euros ($2 trillion) to 2.5 trillion euros over the next 18 months.
Baird analyst David George wrote a note to his clients which read, “Management is optimistic about the potential for additional asset purchases or business opportunities as European banks deleverage further,” per Bloomberg.
The analyst continued by saying that Wells Fargo management has spotted an opportunity to gain market share while European banks try to decrease their US corporate loan portfolios. George rates the company “outperform” and has predicted that the company’s stock will reach $38 within a year.