Record profit can’t ease Wells Fargo bad loan fear
WELLS Fargo, the largest mortgage lender in the US, reported record second-quarter net income yesterday but gave a bleak assessment of its rising bad loans problem.
Net income for the three months to the end of June rocketed 81 per cent to a record quarterly profit of $2.58bn (£1.57bn), or $0.57 a share, compared to $1.75bn, or $0.53, in the second quarter of 2008.
The record profit reflected the doubling in size achieved via the acquisition of Wachovia at the end of last year, pushing revenues for the quarter to $22.5bn.
But the bank warned that non-performing assets had jumped 45 per cent from the first quarter to $18.34bn, with commercial real estate loans particularly weak.
Chief financial officer Howard Atkins conceded that commercial real estate was worrying, but said there were signs that the decline in the economy was bottoming out.