FORTUNE -- In another sign of the huge changes within the banking business since the financial crisis, Wells Fargo (WFC) is on pace to make more money this year than any other bank in the U.S.
Analysts expect the San Francisco-based bank to make $20.8 billion for 2013. That's more than Bank of America (BAC), Goldman Sachs (GS), and Morgan Stanley (MS) are expected to earn combined this year. And it's $3.5 billion more than Wells' closest profit rival, JPMorgan Chase (JPM), which had held the largest profit title for three years in a row.
But JPMorgan's legal woes have cleared the road for the Wells Fargo wagon to take the lead in the profit race. JPMorgan is in the process of negotiating a $13 billion settlement with regulators related to the bank's mortgage business.
For a long time, the traditional business of taking deposits and making loans was seen as the less desirable part of the financial industry. The banks wanted to be on Wall Street, where Goldman and others were making big profits on investment banking and trading. But an increase in regulations and diminished demand for Wall Street's riskier investments have flipped that equation. That's benefited Wells Fargo, which largely stuck with its traditional banking business as others were reaching for profits on Wall Street.
What's more, Wells has used the financial crisis to solidify its lead in mortgage lending as rivals BofA and Citigroup (C) have had to tend to their wounds from the financial crisis, and others disappeared completely. Wells is now by far the nation's largest mortgage lender, issuing roughly a third of all home loans. That paid off last year and in the first half of this year, as low interest rates sparked a refinance boom.
Bank investors and analysts say return on equity, or ROE, is a better measure of a bank's profitability, because it adjusts for size and how much capital is being deployed to produce earnings. But even on that measure, Wells is racing ahead of its rivals. So far this year, Wells ROE has averaged nearly 14%. Compare that to 11% and 10% at Goldman and JPMorgan, respectively. Before the financial crisis, Goldman routinely had an ROE that topped 20%.
On an ROE basis, Wells trails U.S. Bank (USB), which has also shunned Wall Street businesses. That bank had an ROE of 16% in its most recent quarter.
It's been quite a while since any U.S. bank ranked as the most profitable in the world. That distinction goes to China's largest banks, though bad loans appear to be piling up there.
And even in the U.S., analysts don't expect Wells to stay the most profitable (in net income terms) for long. The title is expected to return to JPMorgan next year. So Wells, enjoy it while it lasts.
Turns out that TARP funds weren't meant to finance luxury vacation homes.
FORTUNE -- No matter how one might feel about the 2009 bank bailouts, there is one thing I think we can all agree on: Bank executives shouldn't have used TARP money to buy themselves luxury vacation condos.
But that's exactly what Missouri banker Darryl Layne Woods has admitted to having done.
Woods today plead guilty in federal court to having lied to MOREDan Primack - Aug 27, 2013 3:53 PM ET
The Federal Reserve sheds some light on why Goldman and JPMorgan got a conditional pass on this year's stress tests, but the 41-page report is overkill.
FORTUNE -- The Federal Reserve won't rest until the nation's biggest banks are 100% safe, which means, basically, the Fed won't rest.
On Monday, the Fed released a report assessing how well the banks have done in the past year or so planning for another financial MOREStephen Gandel, senior editor - Aug 20, 2013 5:00 AM ET
The regulations meant to strengthen our big banks may be leaving the U.S. with more troubled small banks.
FORTUNE -- The number of banks in danger of failing is the lowest since the beginning of the financial crisis. That sounds like good news, until you consider this: There are still 11 times more problem banks in the U.S. than there were back in early 2007, before the financial crisis. And the MOREStephen Gandel, senior editor - May 31, 2013 5:00 AM ET
The highly anticipated JPMorgan shareholder meeting felt more like a lunch gathering of a local Toastmasters than Ground Zero of the governance movement.
By Jennifer Reingold, senior editor
FORTUNE -- It was just another beautiful day in Tampa. The sun shone, birds sang, and the manicured lawn at the suburban campus of JPMorgan Chase sparkled as though it had never been touched by shoes before. It probably hadn't before Tuesday morning, MOREMay 21, 2013 1:11 PM ET
Mark Zanoli leaves UBS.
FORTUNE -- Mark Zanoli has stepped down as head of U.S. technology investment banking at UBS, Fortune has learned.
Zanoli originally joined UBS (UBS) in July 2010, following 17 years with J.P. Morgan (JPM) and Hamrecht & Quist.
He was based in San Francisco, and at one point led a team of around 40 professionals. That figure was slashed by more than half late last year in a large round MOREDan Primack - Mar 25, 2013 2:44 PM ET
New York City bean counters would like you to believe that Wall Street bonuses have plummeted since 2006. In fact, the reality is much different, at least for those who are left in the industry.
By Cyrus Sanati
FORTUNE -- Wall Street compensation may look shoddy compared to the boom years, but it's really not as bad as the numbers suggest. Estimates released Tuesday by New York State show bonus payouts MOREFeb 28, 2013 8:34 AM ET
With the Liberty Global deal for Virgin Media, Aryeh Bourkoff's boutique firm takes the spotlight.
FORTUNE -- Liberty Global's $23.3 billion agreement to acquire Virgin Media has thrust little-known investment advisor LionTree into the spotlight, giving it a place among the likes of Goldman Sachs (GS) and JPMorgan Chase (JPM).
LionTree was the lead advisor to Liberty (LBTYA) on its bid for Virgin (VMED), which by any measure was a very big deal. Liberty-Virgin would be MOREKatie Benner - Feb 7, 2013 8:37 AM ET
Vikram Pandit's surprise departure from Citigroup.
FORTUNE -- Here's the lead from today's NY Post story on Citigroup's third quarter earnings:
After five years of languishing in the doghouse, Citigroup's boss, Vikram Pandit, may be enjoying a stint in the sun.
Maybe they meant he would be riding into the sunset...
Citi (C) this morning announced that Pandit has stepped down as CEO and a member of the Citi board, effective immediately. He will MOREDan Primack - Oct 16, 2012 8:23 AM ET
The bankruptcy of Lehman Brothers almost killed Neuberger Berman. Can the company succeed now by embracing Lehman's global ambitions?
FORTUNE -- The asset management business isn't the bastion of stability it used to be. Long known for oh-so-reliable fees and enviable profit margins, traditional equity managers have seen clients stampede to alternatives as the stock market stalled for a decade. They've lost customers to everything from low-cost ETFs to emerging-markets funds, MOREScott Cendrowski, writer - Sep 26, 2012 5:00 AM ET
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