There's a new No. 1 bank in the US
Wells Fargo becomes the most profitable financial giant with the biggest market value. JPMorgan Chase still has the most assets, but it has run into legal trouble.
By Yuval Rosenberg, The Fiscal Times
The biggest U.S. banks underwent a big shift in 2013.
For the first time since 2009, JPMorgan Chase (JPM) was not the most profitable of the nation's financial giants, as massive legal and regulatory settlements cut into its earnings.
Instead, that title went to Wells Fargo (WFC), the country's largest mortgage lender, based on data released by the banks this week.
JPMorgan Chase reported full-year profit of $17.9 billion, down 16 percent from a record $21.3 billion in 2012. Despite a slowdown in mortgage refinancing caused by rising interest rates late in the year, Wells Fargo earned $21.9 billion in 2013, up from $18.9 billion in 2012.
Wells Fargo's stock has outperformed that of JPMorgan over the past year, and it now has a market value of $244 billion, roughly $20 billion larger than JPMorgan's.
JPMorgan came through the financial crisis in the best shape of any large U.S. bank. Its profits surged past those of Goldman Sachs (GS) and Wells Fargo in 2010 and then climbed higher still over the following two years. But its sterling reputation has lost much of its luster more recently as lawsuits and government investigations mounted. The bank agreed to roughly $22 billion in fines and penalties over the past year, and about $29 billion over the past two years.
Earlier this month it agreed to pay $2.6 billion to the U.S. government to settle criminal and civil allegations that it failed to raise red flags about Bernie Madoff's Ponzi scheme. That settlement reduced fourth-quarter profits by about $850 million. It followed a record $13 billion agreement reached in November to settle investigations into its mortgage-bond sales.
"It was in the best interests of our company and shareholders for us to accept responsibility, resolve these issues and move forward," JPMorgan CEO Jamie Dimon said in a statement accompanying the earnings release.
Dimon shrugged off losing the annual profits crown. "The company is doing really well," he told reporters on Tuesday. "And that's what's important, being the best, not the biggest. The biggest, that doesn't worry me that much."
Still, JPMorgan could regain that title fairly quickly if its legal costs ebb and falling demand for mortgages hurts Wells Fargo's bottom line.
More from The Fiscal Times
Why am I NOT SURPRISED that Wells Fargo is No. 1 Bank in the USA ?
HERE'S HOW THEY DO IT!
1. Close perfectly fine accounts so customers don't have access to their "available credit".
2. Increase interest rates on existing A/C's citing "poor" FICO scores - or credit risk
3. Block all established (O/D) protection accounts link to PMA or checking A/C's.
4. When O/D lines of credit are non-accessible to linked checking A/C's - charge a $35 fee.
5. Deny Modifications for underemployed US Tax Payers, until homes become unaffordable.
6. Foreclose homes of our US Citizens so the rich investors have a "second serving"
7. Greet you when you enter bank locations and screw you with their products..
8. Demand bank employees sell more products, and teach them to say "sorry it's not a bank error"
9. Repeat Items 1 thru 8, and NEVER listen to their customer concerns.
Wells Fargo owns more than Two/Thirds of all US Home Mortgages - wait till the market picks up again in one/two years, Bank will quadruple income recovered from underwater home equities!
Wells Fargo is the worst and they show profitability because they screw their customers over and charge fees that they invent. Even when it's their problem, the customer has to pay the fees, then write a letter to have it reviewed by the bank to see if a refund is warranted and it never is.
Wells Fargo is as big of a rip off and scam as the others. I don't trust any of them and don't want to do business withany of them. And they can stick their credit cards too
So glad to work my **** off to get out of debt and now these guys can Kiss My A-- for business.
Young people don't get drawn in by Wells Fargo, you will, eventually regret it.
They are simply adorable and loving little things aren't they?
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