US banking giant Wells Fargo today announced a net loss in the fourth quarter of $2.5 billion, even before it absorbed struggling rival Wachovia.
Although the results for the California-based bank were surprisingly weak, it said it is expanding lending to many customers and does not intend to ask for additional capital from a government rescue fund.
Wells Fargo said the loss amounted to 79 cents a share, despite analyst expectations of a profit of 33 cents a share. The loss came as the bank set aside some $5.6 billion to cover potential loan and credit losses.
It also wrote off $74m linked to the massive fraud of alleged Wall Street scam artist Bernard Madoff.
The results exclude those from Wachovia, the troubled bank snapped up by Wells Fargo last year, which would have reported a loss of $11.2 billion in the fourth quarter on top of a $23.9 billion deficit in the third quarter.
For the full year 2008, Wells Fargo posted a profit of $2.84 billion, a drop of 65% on the previous year.
'Despite the unprecedented contraction in the credit markets, we remained 'open for business' and continued to lend to credit-worthy customers,' said Wells Fargo president and CEO John Stumpf.
'We made $106 billion in new loan commitments during 2008 to consumer, small business and commercial customers and originated $230 billion of residential mortgages,' he added.
Significantly, Wells Fargo said it had no plans to request additional capital from the US Treasury's Troubled Asset Relief Programme, unlike rivals Citigroup and Bank of America.
