Wells Fargo’s profit rises to $6 bil­lion in lat­est quar­ter

The Commercial Appeal - - Business - Matt Ott AS­SO­CI­ATED PRESS

Wells Fargo, still haunted by mul­ti­ple scan­dals, re­ported higher earn­ings in the third quar­ter Fri­day but still fell short of what an­a­lysts were look­ing for.

Wells saw its earn­ings jump to $6 bil­lion from $4.5 bil­lion in 2017’s third quar­ter, al­though last year the bank had to set aside $1 bil­lion for le­gal ex­penses re­lated to its mort­gage prac­tices be­fore the fi­nan­cial cri­sis.

The San Fran­cisco-based bank earned $1.13 a share, less than the $1.17 ex­pected by an­a­lysts sur­veyed by Zacks In­vest­ment Re­search. The com­pany’s rev­enue was up slightly from the same pe­riod last year at $21.9 bil­lion.

The bank has faced sev­eral in­ves­ti­ga­tions in re­cent years over prac­tices in­clud­ing the open­ing of accounts with­out cus­tomers’ con­sent, charg­ing clients for un­nec­es­sary in­sur­ance poli­cies, and im­pos­ing un­fair fees tied to mort­gage rates.

While its ri­vals are ben­e­fit­ing from ris­ing in­ter­est rates and the Repub­li­can­passed tax cut, be­cause of the nu­mer­ous scan­dals Wells Fargo has been or­dered by the gov­ern­ment to halt growth un­til fur­ther no­tice.

Wells an­nounced last month that it planned to cut up to 10 per­cent of its work­force over the next three years. The bank, which em­ploys about 265,000 peo­ple, an­nounced in June that it would sell more than 50 re­tail branches in the Mid­west and would re­duce the num­ber of branches it op­er­ates to about 5,000 by 2020.

The na­tion’s largest mort­gage lender re­ported that its net in­ter­est in­come ticked up just slightly to $12.6 bil­lion, from $12.5 bil­lion in the year-ago pe­riod. That’s de­spite rapidly ris­ing in­ter­est rates, which would typ­i­cally ben­e­fit a bank like Wells Fargo. On Thurs­day, mort­gage buyer Fred­die Mac said the rate on 30-year, fixed-rate mort­gages jumped to an av­er­age 4.90 per­cent from 4.71 per­cent last week.

While its ri­vals are ben­e­fit­ing from ris­ing in­ter­est rates and the Repub­li­can-passed tax cut, be­cause of the nu­mer­ous scan­dals, Wells Fargo has been or­dered by the gov­ern­ment to halt growth un­til fur­ther no­tice. RICHARD DREW/AP

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