Wells’ Profit Streak Likely to End

Wells Fargo ($WFC) reports earnings on Friday. The bank has increased profits for the last 17 quarters in a row. That streak has probably come to an end. Wells has also beaten expectations for the last 10 quarters in a row.

The bank turned to other businesses as 30-year home-lending rates rose more than 1 percentage point, curtailing mortgage refinancings. Lenders probably made $109 billion of such loans in the second quarter, down from $453 billion in the final period of 2012, according to the Mortgage Bankers Association. Total quarterly originations will stay below $300 billion through 2015, the Washington-based group forecasts.

Wells Fargo, which accounted for about 28 percent of U.S. mortgages in the first quarter of 2012, watched that share decline to 16 percent two years later. Mortgage-banking revenue slumped to $1.51 billion from $2.87 billion in the same period.

Stumpf, 60, mostly left investment banking and trading to Wall Street before the 2008 purchase of Wachovia Corp. Wells Fargo’s push into those businesses drew a nod in February from JPMorgan CEO Jamie Dimon, whose firm was the largest global investment bank by revenue in 2013, according to data compiled by Bloomberg Industries.

Posted by on July 9th, 2014 at 12:36 pm


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