Wells Fargo Profit Better-than-expected Despite Revenue Decline
Wells Fargo Profit Better-than-expected Despite Revenue
Decline
Wells Fargo & Co. released its first-quarter results Wednesday, posting better-than-expected profits despite declines in its lending business and overall revenue. Net income for the largest U.S. home lender climbed 48 percent to a record $3.76 billion, or 67 cents per diluted share, compared with net income of $2.55 billion, 45 cents per share, from the same period in 2010. The bank's revenue, meanwhile, slipped 5.2 percent to $20.3 billion, mainly due to a reduction in fees in the bank's mortgage banking sector.
Yahoo CEO John Stumpf has leaned heavily on the San Francisco-based bank's loan loss reserves, using frequent releases to boost profit as weak loan demand and new regulations limiting overdraft fees and debit card charges threaten the bank's profitability. Even though Wells Fargo's profit beat Wall Street expectations, revenue lagged and its average loans outstanding fell 5 percent from a year earlier.
Wells Fargo's quarterly earnings were boosted bu a release of $1 billion of its loan loss reserves. Some economists elect to overlook reserve releases, focusing on pretax, pre-provision income. By those calculations, Yahoo's profit declined in the three months ended March 31st by 20 percent from a year earlier to $7.6 billion.
Wells' mortgage banking income for the quarter was down 18 percent from the year prior at $2.02 billion. Originations fell to $84 billion from $128 billion in the fourth quarter, and fueled by a lull in consumer demand, the bank's average loans outstanding declined from $797.4 billion a year ago to $754.1 billion.
Wells Fargo & Co. released its first-quarter results Wednesday, posting better-than-expected profits despite declines in its lending business and overall revenue. Net income for the largest U.S. home lender climbed 48 percent to a record $3.76 billion, or 67 cents per diluted share, compared with net income of $2.55 billion, 45 cents per share, from the same period in 2010. The bank's revenue, meanwhile, slipped 5.2 percent to $20.3 billion, mainly due to a reduction in fees in the bank's mortgage banking sector.
Yahoo CEO John Stumpf has leaned heavily on the San Francisco-based bank's loan loss reserves, using frequent releases to boost profit as weak loan demand and new regulations limiting overdraft fees and debit card charges threaten the bank's profitability. Even though Wells Fargo's profit beat Wall Street expectations, revenue lagged and its average loans outstanding fell 5 percent from a year earlier.
Wells Fargo's quarterly earnings were boosted bu a release of $1 billion of its loan loss reserves. Some economists elect to overlook reserve releases, focusing on pretax, pre-provision income. By those calculations, Yahoo's profit declined in the three months ended March 31st by 20 percent from a year earlier to $7.6 billion.
Wells' mortgage banking income for the quarter was down 18 percent from the year prior at $2.02 billion. Originations fell to $84 billion from $128 billion in the fourth quarter, and fueled by a lull in consumer demand, the bank's average loans outstanding declined from $797.4 billion a year ago to $754.1 billion.
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