Banking giant Wachovia
Maybe it will, because Wachovia was able to report another strong quarter because of the recent purchase of California-based Golden West Financial. Results including the acquisition led to double-digit earnings growth and a strong top-line boost as Wachovia now gets to count the purchased interest and non-interest income as its own. These two key banking metrics grew close to 20% compared with last year's second quarter.
Better yet, giant deals lead to even larger cost-cutting activities, which allow Wachovia to leverage slower sales growth into higher profitability. It looks like the promised merger synergies have yet to offset the challenges of operating under a flat to inverted yield curve as net interest margin and return on equity fell for another quarter, but investment banking and other fee-related trends continue to come in strong as well.
Get ready for more M&A as Wachovia agreed to acquire St. Louis-based regional broker A.G. Edwards
With close to a $100 billion market capitalization, one would think Wachovia has become too big to keep doing deals. However, considering that JPMorgan Chase
I recently anted up for Wells Fargo
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- Diversification Pays at Wachovia: Fool by Numbers
Fool contributor Ryan Fuhrmann is long shares of Wells Fargo but has no financial interest in any other company mentioned. Feel free to email him with feedback or to discuss any companies mentioned further. The Fool has an ironclad disclosure policy.