Company News: Wal-Mart sees no need to split business

Wal-Mart Stores Inc. sees no need to split itself into multiple companies despite its growing global size and suggestions from some financial analysts that it shed some businesses to generate cash.

Wal-Mart Chief Financial Officer Tom Schoewe told a financial analysts conference Tuesday that Wal-Mart still has room to grow in the United States and internationally.

Schoewe was asked about recent calls from some analysts for Wal-Mart to look at spinning off parts of its diverse business, which includes its namesake stores and Sam’s Club membership warehouses in the U.S. and retail chains in Asia, Latin America and Britain.

“We don’t see any need at all to be considering the kinds of alternatives that you’re talking about. It’s just not necessary,” Schoewe told the Bear Stearns 13th Annual Retail, Restaurants & Consumer Conference. The event was webcast.

Schoewe praised Wal-Mart’s latest expansion deal in China without providing any financial details. Wal-Mart announced Monday it bought 35 percent of a company that operates 101 Trust-Mart stores in China and plans to take full control, but did not confirm reports putting the price tag at around $1 billion for the full Trust-Mart chain.

Wal-Mart’s international businesses have been growing faster than its larger but more mature U.S. operations.

International sales accounted for about 20 percent of Wal-Mart’s total revenues of $345 billion last year but grew 30 percent compared to 8 percent at Wal-Mart U.S. stores.

“Mortgage giant Freddie Mac said Tuesday it will no longer buy those high-risk home mortgages that it deems to be the most vulnerable to foreclosure. The surprise move came amid a deteriorating market for subprime loans affected by slumping home prices and rising interest rates

The government-sponsored company, which is the second-biggest financer of home loans in the United States, said it will begin using stricter standards for mortgages that it buys — including limiting the use of loans requiring less documentation of the borrower’s status than conventional mortgages. The goal is “to help ensure that future borrowers have the income necessary to afford their homes,” McLean, Va.-based Freddie Mac said.

“The steps we are taking today will provide more protection to consumers and enhance the level of underwriting standards in the market,” Richard Syron, the company’s chairman and CEO, said in a statement.

The changes will take effect Sept. 1, the company said, to avoid disrupting the mortgage market.