Bloomberg News

Wells Fargo ‘Optimistic’ on Buying Europe Assets, Baird Says

December 16, 2011

(Updates with share price in the last paragraph.)

Dec. 15 (Bloomberg) -- Wells Fargo & Co. is “optimistic” about buying more European bank assets as the region’s lenders act to weather the debt crisis, said Robert W. Baird & Co.

“Management is optimistic about the potential for additional asset purchases or business opportunities as European banks deleverage further,” David George, a Baird analyst, wrote in a note to clients today after meeting with David Hoyt, head of the San Francisco-based lender’s wholesale-banking division.

The company has purchased at least three loan portfolios from troubled Irish banks this year. It agreed last month to buy $3.3 billion of U.S. commercial real-estate loans from Irish Bank Resolution Corp., the former Anglo Irish Bank Corp. Wells Fargo also bought $1.4 billion of loans from Bank of Ireland Plc and part of Allied Irish Banks LLC’s $1 billion loan portfolio.

Wells Fargo is pursuing European assets as private-equity firms and distressed investors such as Apollo Global Management LLC and Oaktree Capital Management LP seek deals on the Continent. The region’s lenders may shrink assets by 1.5 trillion euros ($2 trillion) to 2.5 trillion euros during the next 18 months, Morgan Stanley analysts including Huw van Steenis wrote in a note last month.

“Management noted that European banks are beginning to shrink their U.S. large corporate portfolios, which should also provide lending market-share gain opportunities” for Wells Fargo, wrote George, who rates the firm “outperform” and predicts the shares will reach $38 apiece within a year.

Alan Elias, a Wells Fargo spokesman, declined to comment.

Wells Fargo declined 1 percent to $25.61 in New York and has dropped 17 percent this year.

--Editors: Peter Eichenbaum, William Ahearn

To contact the reporter on this story: Dakin Campbell in San Francisco at dcampbell27@bloomberg.net

To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net


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