v3 Chapter 893： The core of the future Polaris consortium (2 (2/2)

Last year, Wells Fargo’s spread was around 4.47%, but the research team of Polaris Capital, based on market conditions, calculated that Wells Fargo’s spread this year would be less than 4%, which means that this year’s net profit will be lower than last year.

Not only that, because of the violent fluctuations in the federal funds rate, Wells Fargo has to spend more to absorb reserves from the outside world, but in response to market fluctuations, Wells Fargo's benchmark interest rate has to be adjusted accordingly.

For example, according to the data, the preferential interest rate announced by Wells Fargo Bank was 15%, which rose to 20% in April, but fell to 11% at the end of July, but at the end of September, with the start of the Iran-Iraq War, the interest rate rose to twenty one%!

This interest rate fluctuates in real time, but the previous interest rates for loans and bonds are fixed.

Wells Fargo’s financial report last year disclosed that the average lending rate for a total of 15.6 billion loans was 12.7%, of which the lowest interest rate for bonds was $1.67 billion and only 9.3% for personal housing mortgage loans. The second lowest interest rate of ten thousand US dollars is 10.3%, and there are real estate development loans and so on.

Now with the increase in the federal funds rate, the market bond prices have fallen, and the decline has exceeded 10%. If these bonds are cleaned up now, Wells Fargo will have a loss of 160 million US dollars.

After zero and zero, there are about 9.5 billion U.S. dollars in assets with maturity in more than one year. If all are calculated based on the 10% loss of the bond, these assets will be cleaned up at this time. The loss of 100 million US dollars will reach 950 million US dollars, which is more than the net assets of Wells Fargo Bank of 830 million US dollars, and Wells Fargo will go bankrupt.

Fortunately, the maturity date of these assets is more than one year. As long as the federal funds rate is lower than 10% before the maturity date of the asset comes, Wells Fargo will not be unlucky.

Even in this case, the analysis also evaluated Wells Fargo as a rather conservative bank and a potential stock.

From this, one can imagine how much pressure other banks with aggressive investments face such a harsh environment.

It is no wonder that over the past few years, more than 10,000 and nearly 20,000 banking institutions will close down. Even among the top ten consortia, consortia cannot save their core major banks, and they watched it fail.

At the end of the data, an analysis was made on the difficulty of the acquisition of Wells Fargo Bank.

Although Wells Fargo belongs to the California consortium, the California consortium does not value it. After all, it is only a medium-sized bank that has not yet exited the state of California. The shareholding ratio of the California consortium is about 43%, which has not reached a relative control.

In addition to Wells Fargo Bank, the California Consortium has more than a dozen financial institutions, including Bank of America, Western Bank, Safe Pacific Bank, Wells Fargo Bank, and Crocker National Bank. Which one is not bigger than Wells Fargo Bank?

Not to mention multinational banks such as Bank of America and interstate regional banks such as Western Banks, but in the San Francisco area, Wells Fargo Bank is inferior to Wells Fargo Bank and Crocker National Bank.

Therefore, the analysis stated that the California consortium does not value Wells Fargo. In the face of the current sluggish banking industry and the huge risk of interest rate fluctuations, the California consortium is definitely worried about adding more information to the bank to resist risks.

But there are too many banks under the California Consortium, and because of their strength, there is also huge pressure.

Therefore, as long as the bid is right, the California consortium will not refuse to sell Wells Fargo's equity.

However, the analysis also said that although Wells Fargo is a medium-sized bank, its investment is conservative and its ability to withstand pressure is relatively stronger. The California consortium also knows a certain potential. If it wants to acquire, it does not rule out the suspicion of the Lions of the Wells Fargo Board of Directors. A conservative estimate , The purchase price must be more than one billion US dollars.

The number of billion dollars not only didn't make Xia Yu entangled, but he was relieved, and he was very happy.

There is no doubt that the analysis department of Polaris Capital underestimated the potential of Wells Fargo. Had Xia Yu been a rebirth, he would have made similar judgments.

In his thoughts, the California consortium’s assessment of Wells Fargo would be similar to that in the current information. This is an excellent opportunity.

According to the situation of later generations, it is undoubtedly quite wise for Wells Fargo to focus on the development of community banks at this time, and the development model is excellent.

As long as we can stick to this model to develop, we will still become the top big bank in the United States.

If it is acquired at this time, then the Polaris consortium will establish Optimus Prime, which is based in the United States, and it will not be afraid to head-to-head with the Bank of America of the California consortium, not to mention that he will add a gold finger halo to Wells Fargo. It will be quite amazing.

Therefore, Xia Yu did not hesitate and stopped reading the information of other banks. He directly handed the information to Peter Lynch. When the latter looked at the information, Xia Yu solemnly said: ”Peter, it is most important to hand you one. The mission of this Wells Fargo Bank, you must do your best to acquire it.”

”Don't say it's a billion dollars, even if it's 1.5 billion or even 2 billion dollars, it doesn't matter, I only have one to complete, and I will acquire it wholly!”

”Polaris Capital and all companies under it need it!”

Peter Lynch flashed a flash of lightning in his mind, and at the same time he understood the purpose of the boss Xia Yu instantly.

The boss is planning to take Wells Fargo as the center and attract all the companies under Polaris Capital to form a consortium!

He only felt the blood flow accelerating, and couldn't help but look at Xia Yu and asked, ”Boss, do you want to build a consortium?”

Peter Lynch could see through his own purpose at once, but Xia Yu was not surprised.

Peter Lynch has been on Wall Street where there are many consortiums for many years. He must have done a lot of research on consortia, and it is normal to see it.

In the United States, where consortia are in full swing, it is normal and common for large and small companies and family newspapers to form consortia, so Xia Yu did not hide it, nodded and said: ”Yes, I have this idea, so you understand the acquisition. Is Wells Fargo important?”

Although I don’t know why the boss gave Wells Fargo a glance, Peter Lynch didn’t ask. He was uplifted and nodded openly and said: “I understand, boss, don’t worry, I will definitely buy Wells Fargo.”

Xia Yu nodded ~ he cared, he reassured Peter Lynch again and said: ”Peter, now that the oil crisis is breaking out, it will have a great impact on the financial industry. We must seize the opportunity. Try to acquire Wells Fargo Bank before the end of this year. It doesn't matter if the price is high. Of course, if you can keep the price down, I won't be stingy with bonuses at the end of the year.”

Peter Lynch solemnly responded: ”Boss, I won't let you down.”

After that, Peter Lynch hurriedly left the office to build the Wells Fargo acquisition team.

Xia Yu stayed at the company until about 11:10, and received a notice from the employee. He immediately called Li Wuming downstairs to go back.

The person he was waiting for had already arrived, and it was time to go back.

PS: Due to work reasons, I can only code words late at night, please forgive me, this chapter is 4200 words

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