Bank Watch

WSJ: Wells Fargo nipping at Citigroup’s heels

By the end of the first three months of this year, total assets at Wells Fargo equaled 95 percent of those at Citigroup, which has been paring back some of its legacy assets, The Wall Street Journal reported this week.
By the end of the first three months of this year, total assets at Wells Fargo equaled 95 percent of those at Citigroup, which has been paring back some of its legacy assets, The Wall Street Journal reported this week. jkomer@charlotteobserver.com

The stagecoach is gaining ground.

Wells Fargo is the fourth-largest U.S. bank, but its asset growth has it catching up fast with the third-largest bank, Citigroup, The Wall Street Journal reported this week.

By the end of the first three months of this year, total assets at Wells Fargo equaled 95 percent of those at Citigroup, according to the Journal. With Wells now in talks to purchase $74 billion in commercial-loan assets from General Electric, that would take the lender “within a whisker of reaching parity with Citi,” the Journal reported.

Asset size is a common way banks are ranked. Assets can include loans, cash and securities. (Deposits, though, are considered a liability.)

JPMorgan Chase & Co., with $2.57 trillion in assets, is the biggest U.S. bank, followed by Bank of America with $2.14 trillion.

Wells Fargo reported $1.7 trillion in assets at the end of the first quarter.

The Journal points out that Citi has been paring back some of its legacy assets. But Wells Fargo, the Journal said, is “on a growth tear.”

Growth could come with hazards.

“One concern is that Wells Fargo’s growing heft will register on regulators’ radar,” the Journal reported. “Getting bigger could push it into a higher-risk bucket, requiring the bank to hold more capital. That could weigh on returns.”

The Journal also notes, though, that size alone isn’t what determines capital surcharges for mega banks.

“Interconnectedness among other financial firms and holdings of things like derivatives are also important,” the Journal reported.

“On that count, Wells Fargo is more minnow than whale.”

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