Wells Fargo Profit Drops as Energy Pain Spreads
San Francisco bank charges off about 75% more energy loans as in the fourth quarter
Wells Fargo shares have declined about 10% so far this year. Wells Fargo WFC -0.49 % & Co.’s first-quarter profit fell 5.9% as the nation’s third-largest bank by assets said the slump in oil prices continued to punish energy companies and started to hurt some consumers. Shares were relatively flat as earnings and revenue beat Wall Street estimates.
The San Francisco firm has long been a bellwether of the housing market, where it is a top mortgage lender, but in recent quarters it has also been a barometer for how falling oil prices are affecting big banks. While Wells Fargo executives have stressed that the energy portfolio accounts for only about 2% of overall loans, potential losses are piling up. Discussion of energy dominated the analyst call.
Chief Financial Officer John Shrewsberry said he still expects pain in the oil patch, and the bank will “continue talking about [energy […]
How Saudi Arabia plans to shake up its economy
In late February, several hundred Saudi officials, company executives and foreign consultants gathered in a luxury Riyadh hotel to discuss how Saudi Arabia’s economy could survive an era of cheap oil. One company manager at the event told Reuters that officials from about 30 Saudi government bodies manned booths in which they described their challenges. Corporate bosses were encouraged to “figure out ways to do partnerships to address those needs, to offer feedback, to complain, and to plan future ventures or even just future meetings,” the manager said. “It was like a private sector version of a national parliament.” The workshop was part of Saudi government attempts to work out how to restructure the economy so it no longer relies on oil. The National Transformation Plan (NTP), as Riyadh has dubbed the changes, is […]
U.S. says China to end export subsidies in seven sectors
An employee works at a garment factory, which exports products to Europe, in Hefei, Anhui province January 19, 2015. China has agreed to scrap controversial export subsidies on a range of products from metals to agriculture and textiles, the U.S. Trade Representative said on Thursday. In a deal coinciding with global economic meetings in Washington, the trade representative’s office said China had agreed to end a program known as its “demonstration bases-common service platform” in which it provides export subsidies to Chinese companies in seven economic sectors. The agreement is a step by Beijing to reduce trade frictions with the United States that range from steel and agricultural products to technology and banking. It comes about a year after the United States filed a complaint with the World Trade Organization about the program, alleging “unfair, prohibited export subsidies to a large range of Chinese manufacturers and producers.” “This agreement […]
PetroChina Unit Plans Startup of New Canadian Oil-Sands Plant
The Canadian unit of one of China’s largest oil and gas companies is on track to start operations at a new 35,000-barrel-per-day oil-sands plant later this year despite crude prices being below break-even levels for the project, a senior executive said. PetroChina Co.’s Brion Energy unit plans to begin steaming operations at its MacKay River oil-sands site in northern Alberta later this year and produce first oil in early in 2017, Bob Shepherd, Brion’s executive vice president, said in an interview. “We fully expect to start it up this fall,” pending final approval from parent company PetroChina, Mr. Shepherd said. The startup will mark the first production from PetroChina’s nearly 5 billion-Canadian-dollar ($3.9 billion) investment in two oil-sands projects in northern Alberta. The MacKay River project received approval in 2011 from Alberta provincial regulators […]
OPEC trims 2016 oil demand growth, says its output rises slightly
OPEC on Wednesday predicted global demand for its crude oil will be less than previously thought in 2016 as consumption slows down, increasing the excess supply on the market this year. The monthly report from the Organization of the Petroleum Exporting Countries lowered its forecast of world oil demand growth by 50,000 barrels per day (bpd) and said further downward revisions could follow. OPEC pumped 32.25 million bpd in March, the group said citing secondary sources, up about 15,000 bpd from February. The report points to a 790,000-bpd excess supply in 2016 if the group keeps pumping at March’s rate, up from 760,000 bpd implied in last month’s report. (Reporting by Alex Lawler; Editing by Keith Weir)
