Monitor 100: Wells Fargo Seizes the Originations Crown, BofA Tightens Its Grip on the Top Asset-Holder Title
by Rita Garwood June 2019
Wells Fargo Equipment Finance reported $16.1 billion in 2018 new business volume — just enough to steal the crown from Banc of America Leasing in the volume ranking. However, Wells Fargo’s hold on the volume title may be short lived. With leads of only $152.6 million over Banc of America and $236.2 million over John Deere, it could be anybody’s game next year. In the asset ranking, Banc of America tightened its hold of the top notch, expanding its lead to $4.9 billion, up 81.4% from its $2.7 billion lead last year.
Rita Garwood, Contributing Writer, Monitor
The 28th annual list of Monitor 100 companies reported $514.1 billion in net assets, $201.1 billion in originations and 28,666 employees.
The group maintained steady momentum in portfolio growth, posting a 5.8% year-over-year increase, with 82 companies recording net gains of $31.6 billion, 17 companies posting net declines of $3.3 billion and one company reporting no change. Banc of America Leasing easily maintained its hold of the No. 1 position in the asset ranking with $53.1 billion in net assets, up 2.8% from 2017.
Results in new business volume were not as robust. The group reported $201.1 billion in 2018 originations, up 4.2% year over year, less than half the 8.9% annual growth achieved in last year’s volume ranking. Of the total, 74 companies contributed net origination increases of $16.7 billion while 26 companies reported a collective drop in volume of $8.9 billion.
Business Fixed Investment
The Commerce Department’s Bureau of Economic Analysis reported a 5.1% increase in non-residential equipment and software investment, totaling $1.7 trillion. Eleven sectors demonstrated annualized growth while seven sectors posted net declines, resulting in a collective annualized growth trend of $80.7 billion.
The Wells Fargo Securities Economics Group lowered its GDP growth forecast for 2019 from 2.8% to 2.6% in its monthly outlook for June, primarily due to anecdotal evidence that suggested the uncertainty over trade wars has led to a decline in business fixed investment growth. The group also revised its outlook on Federal Reserve monetary policy, predicting the Fed would cut rates 25 bps at its July 31 meeting after previously predicting that interest rates would remain steady throughout 2019.
According to the Federal Reserve’s Beige Book dated June 5, 2019, economic activity expanded modestly, and all districts reported some growth; however, a few districts also demonstrated a decrease in activity and higher levels of uncertainty. Residential construction continued to grow, and tourism was stronger, while vehicle sales dr
opped, and agricultural conditions remained weak overall. Employment activity increased across the U.S. with steady demand for retail, business services, technical, manufacturing and construction jobs.
New orders for manufactured durable goods in April decreased $5.4 billion (2.1%) to $248.4 billion, according to data from the U.S. Census Bureau. The decrease followed a 1.7% March increase. Transportation equipment, down two of the last three months, drove the decrease, $5.4 billion (5.9%) to $85.4 billion. Excluding transportation, new orders were steady. Shipments of manufactured durable goods decreased $4 billion (1.6%) to $253.3 billion in April. Once again, transportation equipment led the decrease, $3.7 billion (4.1%) to $85.8 billion.
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