Mortgages, Deposits Boost Wells Fargo’s Q4 2011 Profits
Wells Fargo & Co. has achieved record earnings in the last quarter of 2011, pushing further the lender’s year-on-year profit by 28 percent as compared to the previous year’s gains.
For the past three months ending in December, Wells Fargo reported that it realized net income of $4.11 billion or $0.73 per share, an improvement of 20 percent from the $3.41 billion in the same quarter of the previous year.
Despite the bank’s total revenue for the year retreating by four percent to $20.6 billion, the numbers exceeded the guidance of $20 billion earlier set by market analysts.
Wells Fargo netted $15.9 billion for the year, thanks mostly to the higher number of mortgages that the bank had attracted as of September 2011, reaching $120 billion.
Wells Fargo chief executive, John Stumpf called into attention that his bank performed well amidst the backdrop of difficulties that were highlighted by the unsettling condition of the capital markets and the almost year-long prevalence of low interest rates.
On top of that is the snags seen in the general economy that forced many industries to implement measures that reduced costs, including the letting go of significant numbers of employees.
Wells Fargo issued pink slips to many of its workers in the past year, leaving its total workforce to about 264,000.
Overall, Stumpf expressed satisfaction that Wells Fargo’s deposit and loan inventories grew further in 2011, which he added would enable the bank to return “even more capital to our shareholders.”
“I’m extremely pleased with Wells Fargo’s performance in 2011,” Stumpf said in a statement released on Tuesday.
Widely regarded as the biggest U.S. bank in terms of market value, Stumpf said that Wells Fargo is well positioned to expand further but clarified that any future acquisition deals will be confined for now to domestic targets.
“We are kicking lots of tires and we are in a unique position in that we are not capital constrained and can do some things that make good sense for us economically,” Stumpf stressed.
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