The Zacks Analyst Blog Highlights: Wells Fargo, Deutsche Bank, Barclays, JPMorgan Chase and Banco Macro

Zacks

For Immediate Release

Chicago, IL – January 24, 2013 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Wells Fargo & Company (WFC), Deutsche Bank AG (DB), Barclays PLC (BCS), JPMorgan Chase & Co (JPM) and Banco Macro S.A. (BMA).

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Here are highlights from Wednesday’s Analyst Blog:

Wells Fargo Ups Dividend

Wells Fargo & Company (WFC) enhanced its quarterly common stock dividend by 14% to 25 cents per share. The dividend will be paid on Mar 1, 2013 to shareholders of record as of Feb 1, 2013.

This marks Wells Fargo’s 3rd consecutive year of dividend increase, reflecting its commitment to return value to shareholders with strong cash generation capabilities. Prior to this, the company had increased its dividend by 83% (from 12 cents to 22 cents per share) in Mar 2012.

The dividend increase is part of Wells Fargo’s 2012 Capital Plan. The company’s capital plan, including dividend increase and other capital actions, was submitted to the Federal Reserve in Jan 2012. Since the Fed gave its capital plan a green signal, the company increased its quarterly dividend.

Moreover, Wells Fargo has submitted its 2013 Capital Plan earlier this month to the Fed, and it is under review. This plan also seeks permission for an increase in capital distributions. The company’s decision to hike dividend depicts its strong capital position and increases the possibilities of clearing the recent stress test.

For Wells Fargo, its business model is an impressive one that allows it to generate sufficient capital, grow its balance sheet and help return capital to shareholders. Moreover, we believe that strategic acquisitions will expand the company’s business and improve its profitability over time.

Deutsche Bank-FERC Reach Agreement

Frankfurt-based Deutsche Bank AG (DB) has agreed to pay a penalty to the U.S. Federal Energy Regulatory Commission (:FERC) over alleged manipulations in the Ca. electricity markets in 2010. The settlement also requires this bank to execute better compliance measures.

Deutsche Bank will pay a civil penalty of $1.5 million to the FERC within 10 days. Further, the bank has agreed to surrender $172,645 worth of profit along with interest for influencing the Ca. power markets between Jan and Mar 2010.

As per FERC, Deutsche Bank Energy Trading LLC – a wing of Deutsche Bank – had violated the anti-manipulation rule by engaging in a scheme, in which the energy arm  entered into physical transactions to boost its own financial position.

According to the Office of Enforcement of the FERC, these physical transactions sullied the proper functioning of the California Independent System Operator (California ISO) markets. Further, FERC accused the bank of infringing the regulations requiring companies with market-based rate authority to provide correct information.

Though the bank has agreed to pay the penalty, it is yet to admit or deny these accusations. In Nov 2012, Deutsche Bank was willing to challenge these accusations in the court. However, it is likely that the bank discarded the idea as the cost of litigation exceeded the settlement amount.

The abovementioned settlement is the latest win for the regulator that has come down hard on unwarranted trading activities by the companies. The company has also proposed a $470 million penalty on Barclays PLC (BCS) and prohibition of six months for JPMorgan Chase & Co’s (JPM) energy arm from some of the power markets on the grounds of similar practices.

It is a prudent move by Deutsche Bank to settle the charges instead of opting for a litigation, which may have added to its already high expenditures.

Currently, Deutsche Bank retains a Zacks Rank #4 (Sell). However, another foreign bank stock that is performing well and can be recommended for investment purpose is Banco Macro S.A. (BMA), which carries a Zacks Rank #1 (Strong Buy).

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Read the analyst report on WFC

Read the analyst report on DB

Read the analyst report on BCS

Read the analyst report on JPM

Read the analyst report on BMA

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