Dick Bove Is Bearish On Wells Fargo

Speaking on CNBC's Fast Money, Dick Bove of Rafferty Capital said he is keeping the sell rating for Wells Fargo & Co WFC despite the departure of CEO John Stumpf.

He thinks that fundamentals of the company don't merit the premium that it sells relative to book value. He added that pre-tax provision earnings haven't gone up since 2009 and 100 percent of increase in earnings for Wells Fargo has come from reducing its reserves.

Bove thinks that JPMorgan Chase & Co. JPM deserves the premium to the book value, while Wells Fargo doesn't and he thinks that it should trade lower at least to the levels JPMorgan is trading, which is around 110 percent of book value.

A plan to move from a decentralized operation to the centralized operation is expensive and it will increase the cost of Wells Fargo's business, thinks Bove.