Wells Fargo CEO Stumpf Says Some Loan-Loss Rates Are Peaking

Voltron says: I'm not sure the CEOs comments are going to make anyone feel better about Wells Fargo.

excerpt:

Sept. 2 (Bloomberg) -- Wells Fargo & Co., the nation’s largest home lender, may be reaching a peak for losses tied to troubled loans, President and Chief Executive Officer John Stumpf said.

“There are some indications that we’re seeing a top in some of our problem loan areas,” Stumpf said in an interview from Wells Fargo’s San Francisco headquarters broadcast today on Bloomberg Television. In some businesses, the bank is seeing “very high levels of loss, but they look like they’re flattening out.”

Voltron says: agreed. This is an inflection point before the losses resume.

Assets no longer collecting interest climbed 45 percent to $18.3 billion as of June 30 from the first quarter, the lender said on July 22. Charge-offs widened to 2.11 percent of loans in the second quarter from 1.54 percent in the first quarter.

Stumpf has told investors that he must increase profit before taxes and provisions at a pace to offset credit losses.

Voltron says: Oh, they'll "earn" their way out. no problem. whatever...

Loss rates on auto loans are stabilizing, Stumpf said, and “some buckets” of home-equity lines of credit “seem to be maybe not getting worse than they were before.”

Voltron says: That does not inspire confidence.

link: http://www.bloomberg.com/apps/news?pid=20601087&sid=aa7bHfruDGgs