Wells Fargo on Thursday lifted hopes for the stricken banking sector by announcing that it would report record first-quarter profits of $3bn later this month.
The San Francisco-based bank said it expected to report net income of 55 cents a share, more than double what analysts were anticipating, due to strong performance in its mortgage banking business and a smoother-than-expected integration with Wachovia, which it acquired last year.
The lender said it saw $100bn in mortgage originations and a 41 per cent rise in unclosed applications, signalling a healthy second quarter for mortgage originations as hopes rise that the housing market may be approaching a bottom.
“Business momentum in the quarter reflected strength in our traditional banking businesses, strong capital markets activities, and exceptionally strong mortgage banking results,” said Howard Atkins, Wells Fargo’s chief financial officer.
Shocker of the week: There still is a decent bank in the country. Better yet, Wells’ performance means increased probability of paying off the $25 billion in TARP money it received after purchasing Wachovia last year.
Astoundingly, when it comes to Wells Fargo, there’s nothing to complain about. (I welcome contrary opinions to this claim.)