Wells Fargo Earns $2.5bn in First Quarter 2010
Wells Fargo (WFC) posted a $2.5bn profit in Q110, or $0.45 diluted earnings per common share, based primarily on the strategy of providing its clients with several different types of banking products, according to its latest quarterly report (download here.) "While loan demand remained soft in first quarter 2010, businesses as diverse as asset-based lending, debit card, insurance, merchant services, student lending and retirement services all showed solid revenue gains," according to the 10-Q form filed with the Securities & Exchange Commission. "Credit metrics in many portfolios — including loss rates and early loss indicators — performed better than our previous expectations for first quarter 2010," it adds. The lender announced an average of six products per client household, with a goal of reaching eight, approximately half their estimated potential demand. The profit includes a $900m cost increase related to assets brought on the balance sheet upon adoption of new consolidation accounting guidance that limits the types of assets that can be listed off-balance sheet. Revenue in first quarter 2010 was $21.4 billion, up 2% from $21.0 billion in first quarter 2009, despite a 7% decline in average loans. The bank also noted that it is beginning to see profits from its Wachovia acquisition. Wells liquidated loan portfolios from Wachovia by $4.3bn in Q110 and $23.2bn cumulatively. Write to Jacob Gaffney. The author held no relevant investments.