Wells Fargo & Co (WFC), JPMorgan Chase & Co. (JPM): It Is the Right Time to Scrutinize the Financial Sector?

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Wells Fargo & Co (NYSE:WFC)One sector that was badly hurt by the sub-prime crisis of 2008 was the one that started the whole mess, the “banking sector.” Many small and large banks defaulted on the preeminence of the credit crisis and the government had to intervene to relieve people from the mess. Five years have passed since then and things have started to change; the bankers are putting profit is back into system, and the economy is showing some green shoots.

Wells Fargo – Standing apart

One branch of banking that was hit hard for creating the world’s financial mess was investment banking. Pink slips have been common in the sector during last five years, but things are starting to look up. Profitability is back and banks are taking extra care in their actions.

One bank which performed very well since the crash of 2008 is Wells Fargo & Co (NYSE:WFC). Initially, it too faced the crisis heat but easily made it through the situation without much difficulty. The bank grew tremendously in the last decade, and actually bounced back stronger after the crisis. The bank’s stock price has appreciated by 30% in last year. As a matter of fact, the company’s assets have increased by four times in the last decade from a mere $400 million to roughly around $1.6 trillion.

The bank, which has its existence since 1852, acquired Wachovia in 2008 for $23.1 billion; this was hardly a penny of valuation due to non-performing mortgage loans. Since then, the deal has added about $700 billion assets to the balance sheet and made the bank the fourth largest in the nation.

The operation of the bank has continuously evolved over this period of time, though the rising interest rate environment had put some pressure on the perimeter. The company has been posting excellent numbers from for the past year, making it look like a good bet in the near future.

Riskier options

Aggressive investors who are willing to take more risks can opt for JPMorgan Chase & Co. (NYSE:JPM) and Citigroup Inc (NYSE:C). Though both the companies had their own sets of problems after the financial crisis, both of them have been posting good numbers in the past few quarters.

JPMorgan Chase & Co. (NYSE:JPM) has been caught up in various scams, with the most recent being a commodity scam for which it is expected to pay $600 million in penalties. The company is alleged with fraud to its customers in energy markets in California and Michigan. This is not the first time that the bank has faced this kind of trouble, and the company’s history is still haunting the its performance.

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