Tags: Wells | Fargo | Profit

Wells Fargo Profit Rises 19 Percent, Tops Forecasts

Wednesday, 20 Oct 2010 08:33 AM

Wells Fargo & Co.'s income rose 19 percent in the three months ending in September as losses from failed loans continued to fall.

Wells Fargo's net income after paying preferred dividends was $3.15 billion, or 60 cents per share, ahead of the 55 cents per share analysts were expecting, the San Francisco bank reported Wednesday. The bank earned $2.64 billion, or 56 cents per share, in the same period a year earlier.

Like other big banks that have reported results in recent days, Wells Fargo is seeing lower losses from loan defaults, a hopeful sign that American businesses and consumers are becoming more financially stable. Losses from bad loans were $4.1 billion in the third quarter, down 20 percent from the third quarter of 2009.

The number of bad loans fell in almost all of Wells Fargo's business lines: down 26 percent in commercial loans, down 39 percent in commercial real estate, and down 13 percent in credit cards.

Wells Fargo is still setting aside large amounts of funds to cover future losses from loans, although less than a year ago. Wells Fargo set aside $3.45 billion for such losses in the third quarter, down from $6.11 billion last year.

Wells, one of the nation's largest banks, also said it saw a 17 percent increase in new loans to businesses and consumers as mortgage applications reached the second-highest level in the bank's history.

Nonetheless, the total amount of loans on Wells Fargo's books fell to $753.7 billion at the end of September from $766.3 billion in the previous quarter. That's a sign that overall demand for borrowing is declining.

While Wells Fargo has not halted foreclosures, rivals Bank of America Corp. and JPMorgan Chase & Co. have stopped many of their foreclosure proceedings because of evidence that thousands of documents were improperly handled.

CEO John Stumpf has resisted calls to join other banks in suspending foreclosures, and reaffirmed that stance in a conference call with analysts to discuss the company's earnings. Wells Fargo is one of the country's largest mortgage lenders.

"We are confident that our practices, procedures and documentation for both foreclosures and mortgage securitizations are sound and accurate," Stumpf said.

Wells posted revenues of $20.87 billion, compared with $22.47 billion in the third quarter of last year.

Wells Fargo shares fell 26 cents, or 1.1 percent, to $24.29 in morning trading.

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Wells Fargo Co.'s income rose 19 percent in the three months ending in September as losses from failed loans continued to fall. Wells Fargo's net income after paying preferred dividends was $3.15 billion, or 60 cents per share, ahead of the 55 cents per share analysts...
Wells,Fargo,Profit
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2010-33-20
Wednesday, 20 Oct 2010 08:33 AM
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