"Like a kid in a candy store." That's how Wells Fargo & Co. chairman Dick Kovacevich is feeling about the M&A market for financial services. According to the
San Francisco Business Times, Kovacevich told members of the Association for Corporate Growth on Wednesday that his company is "buying with both hands right now, as we've done for the past year."
When asked by Reuters whether Wells Fargo is interested in Washington Mutual Inc. - presently being
shopped around by Goldman Sachs - or Wachovia Corp., Kovacevich declined to comment. He did, however, say his bank is always in the market for what he called "fixer uppers," and that the market is rife with such distressed assets. This year the bank has picked up a handful of small financial services firms, including
Transcap Associates,
Flatiron Credit Co. and
Century Bancshares Inc. Wells Fargo has also stepped in to provide
much-needed capital to battered CIT Group Inc. On Thursday, Wells Fargo provided the commercial finance firm with a $500 million secured facility.
Wells Fargo for the most part sat out the frenzied lending of the past few years, focusing instead on traditional, less risky loans. In his ACG remarks, Kovacevich said the bank's mortgage business lost 4% of its market share between 2005 and 2007 and lost out on nearly $160 billion in fees. A small price to pay for its sturdy financial position today.
- Suzanne Stevens
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You do what you are supposed to do as a banker and in this market you look like a genius.