News
Wells Fargo (WFC) announces investment in Bitcoin ETF
According to a regulatory document, Wells Fargo & Company WFC has announced cryptocurrency exposures through investments in several Bitcoin exchange-traded funds (ETFs). The move indicates growing interest in digital assets among financial institutions.
According to the filing, Wells Fargo purchased shares of Grayscale’s GBTC spot bitcoin ETF, giving the bank $141,817 exposure to the digital asset. Additionally, Wells Fargo invested less than $1,200 in the ProShares Bitcoin Strategy ETF (BITO). This gives investors exposure to Bitcoin futures contracts which will make it easier for them to speculate on the cryptocurrency’s future price movements.
Additionally, the bank has a $99 exposure to Bitcoin Depot Inc., a Bitcoin ATM provider. While the company has forayed into the cryptocurrency space, its investments in these vehicles are relatively small.
This follows news that WFC is looking to offer its wealth management clients the opportunity to invest in Bitcoin ETFs through brokerage accounts.
The company’s Wealth and Investment Management segment provides customized wealth management, brokerage, financial planning, lending, private banking, trust and fiduciary products and services to affluent, high-net-worth and ultra-high-net-worth clients.
In the last reported quarter, WFC reported total revenues of $3.7 billion from the segment, indicating a year-over-year increase of 2%. Additionally, total client assets of $2.18 trillion increased 13% year over year.
However, growing total revenue has become challenging for Wells Fargo. Over the last four years (2019-2023) revenues have recorded a negative compound annual growth rate of 1.2%. Although the parameter has seen an increase in the first quarter of 2024, the same will be affected in the coming period due to the increase in financing costs.
Business sales also resulted in revenue losses. Notably, Wells Fargo divested approximately $2 billion of private equity investments in certain funds to a group of prominent investors in September 2023. Additionally, volatility in fee income continues to impact revenue performance. In 2024, management expects net interest income (NII) to decline 7-9% from $52.4 billion in 2023.
Over the past six months, WFC shares have risen 45.6% versus the industry’s growth of 32.8%.
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Currently, WFC carries a Zacks Rank #1 (Strong Buy).
Other titles to consider
Some other top-tier stocks in the financial sector are Northern Trust Company NTRS e UMB financial company UMBF, each currently sporting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
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NTRS earnings estimates for 2024 have risen 7.4% over the past month. Northern Trust shares have gained 16.3% over the past six months.
UMBF’s earnings estimates for 2024 have risen 14.4% over the past 30 days. Over the last six months, UMB Financial shares have jumped 16.1%.
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