...One of the Highest Rated Banks Globally: Wells Fargo & Company (WFC) remains one of the highest rated banks globally, supported by a superior earnings profile, a solid and consistent management team, and one of the strongest banking franchises across many business lines. WFC's superior earnings performance is a core strength for the company and a positive rating attribute that differentiates it from its peers. Regulatory Rules Influence Evolution of Balance Sheet: WFC's balance sheet has shifted and will continue to do so given new regulatory rules, including the liquidity coverage ratio, which is causing growth in low-yielding cash and short-term investments as well as higher-cost, total loss- absorbing capital (TLAC)-related debt issuances. As a result, in May 2016, WFC lowered some of its financial targets, due also to a challenging environment, including low rates, modest economic growth and a loan mix shift from higher-yielding consumer loans to commercial loans. Strong but Undervalued...
