M&A, Niche Services Among Topics Discussed At U.S. Banks Investor Forum

/ March 22, 2015

Wells Fargo & Co WFC 0.9% recently hosted its annual U.S. Banks Investor Forum in Chicago. Investors discussed a range of topics, including capital levels, regulations, leverage, fees and M&A. Here’s a breakdown of Wells Fargo’s takeaways from the event.

Names In The Market For M&A

According to Wells Fargo analysts, M&A was a hot topic, and several banks indicated that they are in the market for acquisitions, including:

Analysts believe that First Interstate and Triumph are the most likely to make deals in 2015.

Cost-Cutting Still In Focus

Analysts report that cost-cutting is still a major initiative at many banks. Many names are exploring ways to reduce long-term cost by investing in digitization of services.

Growth Via Fees

The current historically-low interest rate environment remains unpredictable. Therefore, many banks have chosen to pursue other means of income growth. Ancillary fee income has been the answer for several banks. Banks are expanding fee-driven aspects of their operations, including treasury management, wealth management and loan syndications.

Niche Businesses Driving Growth

Many of the companies Wells Fargo talked to have been in the process of carving out specialized niche product sets and/or approaches to help create a unique identity in the space. While these niche operations have not yet been fully appreciated in the market, analysts believe valuation expansion will come eventually.

Stock Ratings

Wells Fargo has Outperform ratings on:

  • Capital One Financial Corp. COF 0.63%
  • SunTrust Banks, Inc. STI 1.26%
  • Webster Financial Corporation WBS 2.35%
  • EverBank
  • First Interstate
  • Investors Bancorp

They have Market Perform Ratings on:

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