Senior Analyst Jennifer Thompson of Portales Partners says there are opportunities to be found within the large-cap regional bank universe. She says it is important to focus on banks that have the ability to gain market share and improve returns on equity over time, and points to Wells Fargo & Co (WFC).
“The company has significant market share in not only their core banking business, but also a number of their fee businesses. That market share dominance has enabled them to take market share at a time when other banks are struggling. Market share dominance, a reasonable risk profile and diversity in the revenue stream are helping them to stand out from the crowd,” Thompson said.
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Thomspon says there are other things that separate Well Fargo from its peers; for example, they are the number one, two or three player in each business they operate in.
“It’s scope, it’s scale, and it’s market share, but it’s also execution that separates them from their peers. They have proven their ability to gain market share with a reasonable risk profile throughout the business cycle,” Thompson said.
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