The Banking and Strategy Initiative

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Bank Results Season: HAMP and HARP missed at Wells Fargo earnings fest

English: Wells Fargo Center in Minneapolis, Mi...

English: Wells Fargo Center in Minneapolis, Minnesota, USA at night. (Photo credit: Wikipedia)

For the mortgage leader in Continental USA, the closing out of all foreclosure refinancing deals is the primary concern alongwith lower NIMs even as current market allowed it to take PAT up by 22% maintaining Q4 EPS at $0.92 cents for a $5.2 B bottomline. The bank seems to running down its Cost income ratio (efficiency) yet reporting a 58.3% score for Q1 yet overall ROA is best in industry near 2% for J Morgan at 1.5% for Wells with a comparable  Tier  common of 8.4%

Core loans for the state leader are up to $700 Bln and run off loans down 17% to $91 B. The bank was also neck to neck in Deposits growth as it took Deposits to $939 Bln. NIMs fell but were still a glowing 3.48% even as Servicing fees on mortgages rebounded by under $100 mln and mortgage fee income was still more than a quarter of all Fee Income as Foreclosure sales gains were down $338 mln

The bank totted up more than $3 B in buybacks in the quarter. Net kinterest income as loer than last year’s $11 B but was a good $10.6 B of the $21.8 B topline

Mortgage Banking produced $2.8 Bln in fees apart from shoring up profitability as $3 out of the $4 b net additions purported to retained originations

Mortgage originations were less than double of #2 JP Morgan at $109 B down 20% from Q3 and 16% from Q4 production data

Delinquency is still a high 6.54% and falling vertically from near 7% in Q4

Commissions and incentives took costs up by more than $200 mln of the $800 mln increase even as the bank improved efficiency by half a billion from lack of further settlement costs at IFR and others, mortgage repurchase reserve itself saving $1.4 B compared to Q1 2012

Auto originations added to the strong community banking performance at $6.8 bln, the $13 B from the overall community banking pie yielding a $2.92 B in profits while Wealth Banking scored a $2.5 B in Fees out of its total $3 B topline and Wholesale Banking split Fee and interest income equally in its $6 B topline

Credit card growth, another new segment for the bank has topped off on Q4 volumes while Mortgages are dwindling with the supernary opportunities for profit dwindling with the normal coming back to the markets esp as Banks look at  being slowly reduced to allow firmer interest rates in the USA

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This entry was posted on April 12, 2013 by in Financial Markets and tagged , , , , , , , .


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