Earnings results have kept banks in the limelight this week, as Bank of America turned in its own sweet second-quarter numbers, following similar stellar announcements by Citigroup, JPMorgan Chase, and Wells Fargo (NYSE: WFC). Even though the slowing of the residential mortgage market represents a headwind for each of these banks, investors have still seen fit to lavish some love on each for most of the week.
Wells: Expansion is in the works
Things look a little different today, though, with one notable standout. Wells' stock has been rising already today, nudging its 52-week high by mid-morning, even as its buddies hang around in the red zone. While skimpy mortgage work will certainly be problematic for the nation's biggest lender, investors don't seem worried.
Why is that? Well, it could be that Wells isn't sitting still, waiting for a drop in revenue as the domestic mortgage market takes a breather. Analysts have noted lately that bringing home the bacon from outside the U.S. will help Citi grow its base, while both JPMorgan and Bank of America may suffer from their minimal overseas exposure.
For Wells, that goes at least double, since only 3% of its revenue trickles in from non-domestic sources. But the bank is working on that. Earlier this week, Wells announced that it is expanding its reach in the United Kingdom, pumping up its EAstdil Secured LLC division to provide advice and financing to British commercial real estate customers. Wells has recently announced that it intends to purchase real estate lending division Eurohypo U.K. from Commerzbank AG, in a $6 billion deal.
Just as it does so well at its wealth management unit, Wells plans to engage in a bit of cross-selling to its European clients, as well. Could these announcements be the reason that Wells is climbing today, while its fellows are stuck in a rut? I would bet money on it.
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