Wednesday, April 20, 2011

Wells Fargo (WFC) Can't Overcome Low Mortgage Demand, Revenue Drops

Revenue for Wells Fargo & Co. (NYSE:WFC) in the latest quarter dropped as fees generated from mortgages fell and loan demand faltered. Revenue was down to $20.3 billion, a 5.2 percent decline.

The bank was able to generate a profit though, as its quarterly profit rose to $3.76 billion, or 67 cents a share, up from $2.55 billion, or 45 cents a share, last year in the same quarter.

On average, analysts surveyed by FactSet Research looked for the company to earn 66 cents a share on $21.2 billion of revenue.

Overall loans fell 4 percent to $751.2 billion from last year.

Wells was able to grow deposits for the quarter. On average, Wells Fargo said checking and savings deposit accounts grew 9 percent from 2010’s first quarter.

Chairman and Chief Executive John Stumpf in a statement, “As the economy continued an uneven recovery, our business customers increased borrowing and utilization of credit lines — a hopeful sign that businesses are once again investing for growth.”

Net charge-offs for bad loans in the quarter were $3.21 billion, or 1.73 percent of all loans, compared with $3.84 billion, or 2 percent of loans, at the end of the fourth quarter. Nonperforming real estate and commercial assets were down 5 percent to $30.6 billion from the end of 2010.

Wells Fargo was trading at $28.71, falling $1.36, or 4.52 percents, as of 12:04 PM EDT.

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