Wells Fargo & Co, the biggest US bank by market value, has today reported a 3.5% fall in quarterly profit as it set aside more money to cover potential loan losses.
The bank, which is also the biggest US mortgage lender and a major lender to the energy sector, said its net income fell to $5.17 billion in the second quarter ended June 30, from $5.36 billion a year earlier.
Earnings per share slipped to $1.01 from $1.03, matching the average analyst forecast, according to Thomson Reuters I/B/E/S, as provisions for loan losses rose to $1.07 billion from $300m.
Total revenue for the three month period rose 4% to $22.16 billion.
The bank's new home loan rose to $63 billion in the period, up 2% from a year earlier and 43% from the first three months of the year. Total loans increased 1.05% to $957.2 billion from the previous quarter.
However, the San Francisco-based bank said mortgage banking revenue fell 17% to $1.41 billion, mainly due to a decline in servicing revenue resulting in part from lower mortgage servicing rights hedging results.
Unlike some other big banks, Wells Fargo may not see some of the benefit from second-quarter low interest rates in its mortgage operations until the third quarter, because of differences in accounting, analysts said.
Income from community banking, Well Fargo's biggest business, which includes regional banking and consumer and mortgage lending, fell 1% to $3.18 billion.
