Wells Fargo mum on stress tests, lauds regulation

By Braden Reddall

SAN FRANCISCO (Reuters) - Wells Fargo & Co said it is strongly capitalized despite speculation it may need more funds following completion of the Federal Reserve's stress tests of major U.S. banks.

Executives at the No. 4 U.S. bank, one of 19 large lenders undergoing government "stress tests" to gauge their ability to weather a deep recession, would not talk about the Fed's findings, which could be unveiled as soon as next week.

Chief Executive John Stumpf backed moves on Tuesday by regulators to tighten supervision over the world's largest financial services industry to avoid systemic risk, saying any company that "plays" in that sector should be subject to supervision.

"If you come into the pool, everybody has to be wearing a swimsuit," Stump told shareholders at an annual meeting when asked about government efforts to step up surveillance in the embattled financial services arena.

Stumpf's comments set him slightly apart from some of his peers, including Bank of New York Mellon Corp CEO Robert Kelly, who said on Monday there were too many regulators watching over U.S. companies.

The fourth-largest U.S. bank by assets, which this month posted a record first-quarter profit, Wells Fargo took $25 billion of capital from the government's Troubled Asset Relief Program last fall.

Deutsche Bank analyst Matt O'Conner wrote in a note to clients on Monday that Wells Fargo, along with Bank of America and eight other U.S. lenders, may need to raise more capital based on his own approximation of a stress test of the banks' tangible common equity to risk-adjusted assets.

Stock in Wells Fargo -- in which Warren Buffett's Berkshire Hathaway Inc is the largest shareholder -- climbed nearly 1 percent in after-hours trade, after sliding more than 4 percent in the regular session to close at $19.48.