Business

Wells Fargo’s profit up 13 percent; revenue slips

Third-quarter profit for Wells Fargo & Co., the biggest US mortgage lender, jumped 13 percent as a decline in revenue from mortgage lending was offset by reduced expenses and fewer soured loans.

Net income increased to $5.6 billion in the July-September period from $4.9 billion a year earlier. On a per-share basis, earnings were 99 cents, beating the 97 cents forecast by Wall Street.

Third-quarter revenue dipped to $20.5 billion from $21.2 billion, coming in below the analysts’ forecast of $21.1 billion. The bank’s stock edged down 1 cent to close at $41.40.

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Interest rates on US mortgages rose sharply in the spring and summer. That had a negative impact on Wells Fargo’s mortgage business. The San Francisco-based bank controls nearly one-third of the US mortgage market. Much of its lending business has been coming from mortgage refinancing, which was reduced by the spike in interest rates.

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Wells Fargo funded $80 billion worth of mortgages in the third quarter, down from $139 billion a year earlier.

Fewer bad loans in an improving housing market cut Wells Fargo’s lending losses to $975 million from $2.4 billion in the third quarter of 2012.

The bank reduced expenses to $12.1 billion, down $153 million from the second quarter.