Why is Wells trading at a TBV of 1.25 when Citi, which has a stronger investment bank, better management, and selling parts of it's asian consumer banks, is only at .8 TBV. I understand that Citi has increased regulatory risks, but there has to be something I am missing here.
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Hi johnfinn, whoops, looks like nobody chimed in here.... maybe one of these discussions below is relevant:
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Fingers crossed that one of those helps you.
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Since markets are forward-looking, there is more growth being assigned to WFC...not sure how else to answer that.
In theory that definitely makes sense - if I were asked in an interview why ABC trades at a higher multiple, pricing in growth would be the clear answer. In practice through, Citi has a annualized growth rate of revenue of around 1% compared to Wells -6% (over a three year time period) in addition to no net margin growth for Wells and slight increases in net margin for Citi. Clearly, markets are forward looking, but I doubt that Wells' growth will massively outpace Citi's.
Wells is operating under an asset cap and finally moving out of the crosshairs of regulators. So there are some tailwinds there.
Nihil debitis id quos porro. Odio nam quia atque quam. Inventore suscipit qui id corporis a quia.
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