Wells Fargo and JPMorgan Chase were higher in pre-market trading on Tuesday, but both banks are making headlines for two very different reasons.
Here’s why these two bank stocks are gaining ground today:
Wells Fargo (WFC)
Wells Fargo was higher in pre-market trade ahead of CEO John Stumpf’s testimony in front of the Senate Banking Committee. Shares were up 1.65% as of 10 AM EDT.
The CEO is largely expected to tell the panel that he takes “full responsibility” for the bank’s unethical sales practices, which required retail banking employees to meet far-reaching sales goals.
Stumpf is also expected to apologize for not taking action sooner.
Wells Fargo has agreed to pay a $185 million fine for the creation of two million credit card and deposit accounts without customer permission.
Sentiment on the stock was also boosted by an upgrade from Morgan Stanley from “overweight” to “equal-weight.”
Wells Fargo stock has been under pressure since news of the account scandal broke. The bank expects that any additional fees would only be a one-time cost that the company would handle thanks to its excess capital. Management also says that extra fees will not affect the company’s ability to pay its dividend.
JPMorgan (JPM)
Shares for JPMorgan Chase were higher in pre-market after news broke that the company had appointed Todd Combs to its board of directors. The stock was up 0.88% as of 10 AM EDT.
Combs is an investment officer at Berkshire Hathaway (BRK), owned by Warren Buffet, and manages $9 billion in assets. He began working at Berkshire six years ago.
Buffet called hiring Combs “one of his best moves.”
Prior to Berkshire Hathaway, Combs was CEO at Castle Point Capital, which managed family foundations, endowments and institutions.
JPMorgan called Combs an “extraordinary leader, investor and thinker.” The bank praised his “deep understanding” of business and finance.
Combs will join JPMorgan immediately.
