Oct 12 (Reuters) – Wells Fargo & Co on Friday
reported a 22 percent increase in third-quarter profit on a
surge in mortgage lending.
The fourth biggest U.S. bank said net income totaled $4.9
billion, or 88 cents a share, in the quarter, up from $4.1
billion, or 72 cents a share, in the same period a year earlier.
The bank’s latest EPS topped the analysts’ consensus estimate of
87 cents, according to Thomson Reuters I/B/E/S.
Wells Fargo, the largest U.S. home lender, posted mortgage
banking revenue of $2.8 billion, up more than 50 percent from a
year ago. The bank made $139 billion in mortgages versus $89
billion a year ago, but up only slightly from the second
quarter.
Wells Fargo and other banks are experiencing a jump in home
lending as borrowers refinance their homes at low interest
rates.
The bank’s net interest margin – the spread it makes on what
it pays on deposits and makes on loans – fell to 3.66 percent
from 3.91 percent in the second quarter, a bigger drop than it
had warned of last month. Banks are seeing the margin shrink as
older loans with higher interest rates are paid down.
