Wells Fargo vs Bank of America

2683 Words Nov 10th, 2011 11 Pages
The Perfect Match: Wells Fargo vs. Bank of America The banking industry is highly competitive. The financial services industry has been around for hundreds of years. Wells Fargo has many competitors itself. In this paper, I will be doing a comparison of Wells Fargo & Company (WFC) and one of its biggest competitors, Bank of America Corporation (BAC). By analyzing looking at the financial ratios, one can see whether the company is successful or not. In the following, I will try to analyze and make a comparison of Wells Fargo’s and Bank of America’s recent performance in growth, income, and efficiency. Using a these criteria, I will determine which bank is the better buy according my analysis. My analysis of WFC & BAC’s performances …show more content…
Wells Fargo’s deposits totaled $847.9 billion at December 31, 2010, compared with $824.0 billion at December 31, 2009. (p 53 on 10k) Year-end total loans of BAC increased $40.3 billion to $940.4 billion in 2010 compared to 2009. According to its 2010 annual report, the increase was primarily due to the impact of adopting new consolidation guidance partially offset by continued deleveraging by consumers, tighter underwriting and the elevated levels of liquidity of commercial clients. WFC total loans… BAC’s year-end total equity decreased $3.2 billion (-1%) in 2010 compared to 2009. According BAC’s 2010 annual report, the decrease was primarily driven by goodwill impairment charges of $12.4 billion and the impact of adopting new consolidation guidance as BAC recorded a $6.2 billion charge to retained earnings for newly consolidated loans. WFC year-end total equity …. In 2010, BAC reported a net loss of $2.2 billion compared to net income of $6.3 billion in 2009. (pg 31) In comparison, WFC reported a profit increase for the full year of 2010. WFC year-end net income was $12.4 billion in 2010 compared to $12.28 billion in 2009. This is a 1% increase. Wells Fargo attributed most of its increase in net income to revenue growth across many business sectors, improvement on asset quality, and the acquisition of Wachovia Corporation. The increase in net income was also attributable to a reduction in provision for credit losses; the bank was able to lessen its

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