Rule May Give Wells Fargo an Advantage
Wells Fargo & Co. might get a bigger boost to earnings than other banks next year after an accounting rule that favors more acquisitive companies takes effect in January.
The new rule, which eliminates the amortization of goodwill under the purchase accounting method, is expected to increase San Francisco-based Wells Fargo’s after-tax net income by about $560 million in 2002, according to a company filing with the Securities and Exchange Commission. The No. 4 U.S. bank’s non-interest expense is expected to fall by $600 million, before taxes.
Wells shares fell 50 cents to close at $45.64 on the New York Stock Exchange.
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