Moody’s comments on Wells Fargo’s 4th quarter earnings pre-announcement
Moody’s said that Wells Fargo’s planned $1.4 billion fourth-quarter provision related to its home-equity portfolio is manageable when compared to Wells Fargo’s large earnings base and high capital ratios. Wells Fargo & Company senior rating is Aa1, and the lead bank, Wells Fargo Bank NA, has a financial rating of A (the highest on a separate scale of A to E) and it is rated Aaa for deposits.
The rating outlook is stable.
Moody’s noted that the majority of this provision relates to loans originated outside of Wells Fargo’s direct retail channel. Moody’s believes that loans originated through the company’s retail channels, which represents a large portion of the mortgage portfolio, is of higher quality due to better client selection. This assumption has been supported by recent loan performance. This is a central tenet of the firm’s current ratings and outlook. — www.theasianbanker.com (November 29 2007)–