Wells Fargo to buy Prudential’s joint-venture stake For $4.5 billion
(Dow Jones) Wells Fargo & Co. said Tuesday it will buy out Prudential Financial Inc.’s (PRU) stake in its retail brokerage joint venture for $4.5 billion in cash, a move that comes a day after the bank said it would repay $25 billion in government bailout money.
San Francisco-based Wells Fargo will acquire Prudential’s non-controlling stake in Wells Fargo Advisors LLC, the joint venture, before the end of the year, the two companies said in a press release announcing the deal. The deal comes more than a year after Prudential, one of the country’s largest insurers, publicly announced its intention to divest its stake.
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Wells Fargo, Key Bank and others increase loan loss reserves against bad loans
This fits with what has been reported here for over a year now about the coming loan defaults, increasing unemployment and how that is going drag down more banks that has large amounts of these dodgy loans on their respective balance-sheets. In this Reuters article they mention the coming trouble in the Commercial Real Estate market and that has been covered here and in our sister publication (Commercial Finance Blog).
News (Reuters):
Wells Fargo & Co and several other major U.S. banks said the troubled economy drove big increases in bad loans, reducing second-quarter earnings.
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Wells Fargo to pay $371 million dollar dividend to Treasury
When I see that Wells Fargo has seemed to put itself in a position to not be distressed and is making good on its commitment to the bailout money, why didn’t we just let the “too big to fail” banks just fail and allow banks like Wells Fargo, purchase their assets and reward good decision making? I believe in the end, historians will agree that lettings the bad banks fail and having good banks rise would of been the best course of action.
News:
Wells Fargo said Monday that it will pay a $371.5 million dividend to the U.S. Treasury on its 25,000 preferred shares purchased last October for $25 billion. The money received was part of the government’s $700 billion Troubled Asset Relief Program.
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