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Mortgage business boosts Wells Fargo profit

Much of the revenue gains in the quarter stemmed from Wells Fargo’s consumer lending business.

Matt Rourke/Associated Press/File

Much of the revenue gains in the quarter stemmed from Wells Fargo’s consumer lending business.

NEW YORK — Wells Fargo reported $5.1 billion in profit for the fourth quarter on Friday, a 24 percent increase, driven by the bank’s lucrative mortgage business.

Seizing on low-interest rates that have spurred a flurry of refinancing activity, the bank again notched record profits. For the last 12 quarters, profits at the bank have increased.

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In this latest quarter, Wells Fargo, based in San Francisco, reported earnings of 91 cents a share, which exceeded analysts’ expectations. Analysts had estimated that the bank would report earnings of 89 cents a share.

Wells Fargo, unlike many of its rivals, has been able to steadily increase its revenue. The first bank to release fourth-quarter earnings, Wells Fargo reported $21.95 billion in revenue in the fourth quarter, up 7 percent from a year earlier.

Much of the revenue gains stemmed from the bank’s consumer lending business, as borrowers jumped on record low interest rates to refinance their mortgages. Wells Fargo, which dominates the market as the nation’s largest mortgage lender, notched $125 billion in mortgage originations, up from $120 billion in the fourth quarter of 2011. Refinancing applications accounted for nearly 75 percent of that total.

The big profit in the group came from the extra money Wells Fargo makes bundling the mortgages into bonds and selling them to the government. In the fourth quarter, the bank reported $2.8 billion of net gains on its mortgages activities, up 51 percent.

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