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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) January 21, 1999.
NORWEST FINANCIAL, INC.
(Exact name of registrant as specified in its charter)
Iowa 2-80466 42-1186565
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation) Number) Identification No.)
206 Eighth Street, Des Moines, Iowa 50309
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (515) 243-2131
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Item 5. Other Events.
Attached hereto as Exhibit 99 is a copy of the Press Release
issued on January 21, 1999, announcing the consolidated
financial results of Norwest Financial, Inc. and its
subsidiaries for the year ended December 31, 1998.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
99 Copy of the Press Release issued on January 21, 1999
announcing the consolidated financial results of Norwest
Financial, Inc. and its subsidiaries for the year ended
December 31, 1998.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
NORWEST FINANCIAL, INC.
By: /s/ Dennis E. Young
Dennis E. Young
Executive Vice President
and Chief Financial Officer
Date: January 25, 1999
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EXHIBIT 99
For further information contact:
Denise J.A. Holck
Assistant Vice President
515/557-7346
Norwest Financial, Inc. Announces 1998 Earnings
Key Financial Highlights
(Dollar Amounts in Thousands)
For the Year Ended
December 31, 1998 1998 1997 Change
Total Income $2,005,765 $1,728,796 +16%
Net Earnings
(excluding 4th quarter charges) $ 262,531 $ 269,450 -3%
Net Earnings $ 238,604 $ 269,450 -11%
Return on
Average Assets 2.4% 3.2%
Return on
Average Equity 16.3% 22.3%
At: 12/31/98 12/31/97
Finance Receivables Outstanding:
Consumer Finance $ 5,218,486 $4,783,471
Automobile Finance $ 1,981,816 $1,442,614
Credit Card $ 500,616 $ 422,435
Commercial $ 569,309 $ 465,601
Total Receivables $ 8,270,227 $7,114,121
Total Assets $10,516,207 $9,321,924
Stockholder's Equity $ 1,565,213 $1,363,790
Debt to Equity 535% 546%
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Des Moines, Iowa, January 20, 1998 - Norwest Financial, Inc.
announced today net earnings of $239 million for the year
ended December 31, 1998. This represents an 11 percent
decrease compared to net earnings of $269 million for the
year ended December 31, 1997. On November 2, 1998, Wells
Fargo & Company merged with WFC Holding Corporation, a
wholly-owned subsidiary of Norwest Corporation. In
connection with the merger, Norwest Corporation, the
ultimate parent of Norwest Financial, Inc., changed its name
to Wells Fargo & Company. In the fourth quarter of 1998,
Norwest Financial, Inc. recognized additional write-offs of
$37.4 million to realign its write-off policies with other
business groups of Wells Fargo & Company. Excluding the
fourth quarter charges, net earnings were $262.5 million, a
3% decrease compared to 1997 net earnings.
Excluding the additional fourth quarter write-offs, total
net write-offs improved to 3.51 percent compared to 3.63
percent one year earlier. In the consumer finance
portfolio, write-offs were 2.99 percent compared with 3.50
percent for the year-earlier period; credit card write-offs
were 4.48 percent compared to 5.16 percent, and commercial
write-offs were .57 percent compared to .61 percent. Write-
offs in the Company's automobile finance unit were 5.75
percent compared to 5.70 percent one year earlier.
Finance receivables outstanding at December 31, 1998,
totaled $8.3 billion, an increase of $1.2 billion compared
to receivables outstanding of $7.1 billion one year earlier.
Several acquisitions contributed to the increase in net
receivables outstanding, including the April acquisition of
National Retail Credit Services Limited, a private label
revolving sales finance business headquartered in Toronto,
Ontario, which added $305 million of receivables at close of
sale; and the October portfolio acquisition of $320 million
of receivables from SunStar Acceptance Corporation, a
division of NationsBank. In addition, Reliable Financial
Services, Inc., an automobile financing business
headquartered in San Juan, Puerto Rico, was contributed to
Norwest Financial, Inc. by its parent company in June.
Reliable had $293 million of receivables on the date of
contribution.
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The Company's average cost of borrowed funds was 6.40
percent, up from 6.37 percent in 1997. Long-term debt
outstanding totaled $5.3 billion at December 31, 1998;
commercial paper totaled $2.7 billion. Norwest Financial's
term-debt securities are rated AA by Duff & Phelps Inc.; AA
by Fitch IBCA, Inc.; Aa3 by Moody's Investors Service; A+ by
Standard & Poor's Corporation; and, AA+ by Thomson
BankWatch, Inc.
Norwest Financial, Inc. is a $10.5 billion financial
services company headquartered in Des Moines, Iowa, and a
subsidiary of San Francisco-based Wells Fargo & Company.
The Company's principal business is lending to consumers
through offices in the United States, Canada, and Puerto
Rico. Other business activities include accounts receivable
and lease financing, and the sale of information and data
processing computer services to the finance industry. In
addition to its own consumer finance operations, Norwest
Financial, Inc. also manages Island Finance, a consumer
finance company headquartered in San Juan, Puerto Rico, with
$890 million in consumer finance receivables in Puerto Rico,
Panama, the Netherland Antilles, the U.S. Virgin Islands,
Aruba, and Costa Rica.
