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4 years ago
Wells Fargo says sufficiently capitalized to ride out severe stress
September 16, 2013 / 8:13 PM / 4 years ago

Wells Fargo says sufficiently capitalized to ride out severe stress

Sept 16 (Reuters) - Wells Fargo & Co is sufficiently capitalized to weather a hypothetical 'severely adverse scenario', the bank's mid-cycle stress test results showed.

The bank's projected pro forma Tier 1 common equity ratio, under Basel I, fell to a low of 9.9 percent during the nine-quarter period through June 30, 2015.

The fourth-largest U.S. bank's severely adverse scenario assumes an intense recession in the United States due to extreme fiscal tightening domestically and a deep global recession, the company said in a disclosure on its website on Monday. ()

Wells Fargo projects a minimum Tier 1 risk-based capital ratio of 11.3 percent and minimum Tier 1 leverage ratio of 9 percent during the stress scenario.

The capital ratios are well above the minimum regulatory requirements mandated by the Federal Reserve.

The bank estimated a cumulative pro-forma net loss of $3.8 billion before taxes for the nine-quarter test horizon.

Wells Fargo shares closed up 1.6 percent at $42.89 on the New York Stock Exchange.

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