Wells Fargo & Company (WFC): What’s Going To Happen?

Competition

Among Wells Fargo’s major competitors are Bank of America Corp (NYSE:BAC) and JPMorgan Chase & Co. (NYSE:JPM). Bank of America reported an earnings miss on revenues that surpassed their estimates. The bank’s earnings were hit by legal settlements, while the earnings were well supported by better expense management under the bank’s Project New BAC. JPMorgan Chase reported a positive EPS surprise of 15% during the first quarter on a revenue beat. However, both reported higher mortgage originations during the first quarter. JPMorgan Chase & Co. (NYSE:JPM) originated $52.7 billion mortgages, compared to Bank of America Corp (NYSE:BAC)’s $25.04 billion during the first quarter. Mortgage originations at JPMorgan and Bank of America increased 3% and 11%, respectively, over the prior quarter.

Besides, Wells Fargo’s intended increase in its mortgage banking unit’s headcount comes at a time when JPMorgan Chase & Co. (NYSE:JPM) has shown its intention of decreasing its mortgage banking unit’s headcount by around 14,000 jobs.

Conclusion

Wells Fargo seems to be committed in retaining its top market share in the US mortgage markets. For this reason it has started a expanding its office facilities at different locations. Besides, the bank will hire more employees once the facilities are expanded. Therefore, I believe history will repeat itself and Wells Fargo will benefit from the recovering US housing markets as it did during prior quarter, which is why I have a buy rating for the stock.

The article Will History Repeat Itself for Wells Fargo? originally appeared on Fool.com.

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