Looks like Wells Fargo is set to do some cherry picking.___________________________________________________________________________________________
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Wells Fargo Chairman eyes possible acquisitions
By Gina Keating
BEVERLY HILLS, California (Reuters) - The chairman of the No. 2 U.S. mortgage bank said on Wednesday that his company was "buying with both hands
" and, given the distressed state of financial assets, he felt "like a kid in a candy store.
Wells Fargo (WFC.N) Chairman Richard Kovacevich declined to comment to Reuters at a conference in Beverly Hills, California, on whether the company is interested in buying Washington Mutual Inc
(WM.N) or Wachovia Corp
(WB.N) but indicated he was interested in buying other banks in distress.
"Wells Fargo often buys fixer uppers," companies that have had some hard knocks and can be rehabilitated in two or three years, he said in a speech at the Association of Corporate Growth 2008 conference. "Given the financial conditions today I feel like a kid in a candy store. There is a lot out there today
Seattle-based thrift Washington Mutual has hired Goldman Sachs & Co (GS.N) and Morgan Stanley (MS.N) to run an auction and potential suitors include Citigroup Inc (C.N), HSBC Holdings Plc (HSBA.L), JPMorgan Chase & Co (JPM.N) and Wells Fargo & Co (WFC.N), one source told Reuters.
"We are buying with both hands right now, as we have done for the past year," Kovacevich said, describing himself as a "confessed serial acquirer.
In an interview ahead of his speech, he told Reuters that Wells Fargo was not alone in looking for good deals.
"I think there's going to be a lot of mergers and acquisitions for either good reasons or because people don't have choices,
" he said.
Kovacevich also said he was hoping for an improvement to credit markets in the first half of next year.
"Hopefully between the first of the year and no later than the middle of the year ... (things will) for things to get more normal than they are now," he said.
During a question-and-answer portion of his speech, Kovacevich criticized fellow financial institutions for failing to manage their risks and liquidity.
"I've been through six cycles and this is the only cycle where the problems started with financial services companies," he said. "Usually what happens is our customers get into problems, then we get into problems, but we caused this.
He noted that that Wells Fargo lost 4 percent of market share per year between 2005 and 2007, and $160 billion in fees in 2006 alone because of its refusal to sell the type of risky mortgages that are now undermining the U.S. economy.
The failure of regulators to notice that "someone who has been in the business for 30 years wouldn't do it" shows that "our regulatory system is not working," he said.
He said more scrutiny should fall on incentives systems for financial institution executives who are rewarded even when risky bets don't pan out.
But he said U.S. Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke "have done the right things" in bailing out American Insurance Group
"I know they didn't want to give AIG all the money they did given what they did with Lehman but it really had the potential to bring down not only the U.S. insurance markets
... but quite frankly a lot of the rest of the world," he said.
The key to a U.S. economic recovery, he said, is to "keep credit going (and) get housing to the bottom."
"It's not how far down to the bottom we get but how quickly we get there
," he said. "I think we can get out of this but that's a lot of 'ifs' and it's kind of scary."
(Writing by Sinead Carew; Editing by Gary Hill)