Ahead of the Bell: Wells Fargo earnings on tap

posted: 37 DAYS 10 HOURS AGO

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NEW YORK -Wells Fargo & Co., the nation's fourth largest bank by assets, is set to report its third-quarter results before the market opens on Wednesday.

The market wants to see signs that loan losses are stabilizing and that the bank's core retail banking business is on solid footing.

But analysts are bracing for the San Francisco-based bank to report more loan losses after results from JPMorgan Chase & Co., Citigroup Inc. and Bank of America Inc. last week showed consumers and businesses are still having trouble paying off their debts.

According to a poll by Thomson Reuters, analysts are expecting Wells Fargo to post earnings of 36 cents per share. In the third quarter of last year, Wells Fargo earned 49 cents per share before the close of its acquisition of Wachovia Corp.

Wells Fargo has been able to weather the credit crisis better than many of its big bank peers due to its conservative nature. But the portfolio of loans it inherited from Wachovia has been a cause for worry. Wells Fargo took over the Charlotte, N.C.-based bank last fall as it nearly collapsed under the weight of bad mortgage loans.

One of the big questions overhanging the market is whether Wells was able to grow its mortgage banking business again during the third quarter. After income from mortgage banking more than doubled in the second quarter, analysts warned that activity at those levels was not sustainable and would likely taper off. Still, Wells Fargo had $90 billion of unclosed mortgage applications in the pipeline at the end of the second quarter.

2009-10-21 06:23:55