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Dick Bove Upgrades Wells Fargo, 'Convinced' Bank Stock Will Recover

Dick Bove Upgrades Wells Fargo, 'Convinced' Bank Stock Will Recover

By    |   Friday, 02 August 2019 08:29 AM

Investment guru Dick Bove reportedly is bullish on Wells Fargo shares.

The Odeon Capital senior banking analyst raised his rating on Wells Fargo to buy from hold, citing the bank’s “enormous financial strength,” CNBC reported.

“I am convinced that the company will recover,” Bove said in a note to clients Thursday.

“The restructuring is likely to be successful.”

Wells Fargo (WFC) has been undergoing an intense restructuring program since 2016 when news that employees at the bank had created millions of fake bank accounts to meet sales quotas severely damaged the reputation of Wells and drew scrutiny from regulators. Last year, the Federal Reserve capped the bank’s asset growth after Wells Fargo discovered more problems with customer dealings.

“Make no mistake, though, the bank is in a great deal of trouble,” Bove said, as he emphasized that Wells Fargo’s problems do not stem from “traditional areas.” However, even with a sizable number of government investigations, Bove said the fines will not be a problem for country’s fourth-largest bank.

Earlier this week, Wells Fargo said it has created a new role dedicated to consumer satisfaction and remediation, as the San Francisco-based bank continues to work through fallout of a scandal that erupted nearly three years ago.

Andy Rowe will become head of Enterprise Customer Excellence and oversee the bank’s consumer strategy in addition to its remediation, complaint and conduct management efforts, Reuters said.

“Under Andy’s leadership, the Enterprise Customer Excellence group will help connect the dots between many of the very important functions and initiatives that are helping us serve our customers even better,” said Wells Fargo’s head of consumer banking, Mary Mack.

Rowe joined the bank in 2017 to steer consumer strategy and help the bank rebound from revelations that employees opened potentially millions of unauthorized accounts. Internal and regulatory probes in the aftermath of the scandal has resulted in billions of dollars in fines, penalties and an unprecedented cap on its balance sheet by the Federal Reserve.

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Investment guru Dick Bove reportedly is bullish on Wells Fargo shares.
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Friday, 02 August 2019 08:29 AM
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