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Wells Fargo profits fall

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Wells Fargo & Co. said fourth-quarter profits dropped 38 percent as borrowers fell behind on $1.56 billion of loans, Bloomberg reported.



Net income declined to $1.36 billion, or 41 cents a share, from $2.18 billion, or 64 cents a share, a year earlier, the company said today in a statement. Wells Fargo’s stock price increased as much as 6.1 percent in New York trading as the profit exceeded analysts’ estimates.

The bank suffered its first decrease in profit since 2001 after making it easier for some borrowers to receive home equity loans. The result was higher defaults amid a housing slump that CEO John Stumpf has called the worst since the Great Depression. The company said today that more borrowers are now falling behind on consumer loans.



Wells Fargo stock rose 46 cents to $26.95 in early trading in New York. The bank’s shares fell 27 percent in 12 months ending yesterday, compared with the 31 percent decline in the 24-member KBW Bank Stock index.

Revenues rose 8.5 percent to $10.2 billion. The bank said the provision for future loan losses almost tripled to $2.6 billion.