Banking, finance, and taxes
The Stock Market Was Right About Wells Fargo (WFC): It Cuts Dividend
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Wells Fargo (WFC) is supposed to be one of the healthier big banks. The market has not treated that way, driving its shares relentlessly lower–down 40% over the last five trading days which is about the same as Citigroup (C).
It turns out things were not so good at WFC. It cut its dividend this morning and said the move would save $5 billion. The firm obviously thinks it will need the money now. Or, maybe it just wants a rainy day fund.
The bank said it would cut its quarterly pay-out to $.05 from $.34. WFC made one comment that should raise some concern. “Our merger with Wachovia is on track and we remain as optimistic as ever about its potential benefits for all our stakeholders.” The bank might have used stronger language about the future of the marriage.
Douglas A. McIntyre
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