Wells Fargo Cashes in on Mortgage Boom, expects to make $3 billion

http://finance.yahoo.com/loans/article/106893/Wells-Cashes-in-on-Mortgage-Boom


Wells Cashes in on Mortgage Boom
by Colin Barr
Thursday, April 9, 2009provided by

The big bank's fat first quarter is the result of a federally backed mortgage-refinancing surge. Still, some say banks aren't out of the woods yet.

Wells Fargo's numbers show how the big banks hope to muddle through the deepest economic downturn in decades — with some help from their friends in Washington.


San Francisco-based Wells surprised Wall Street Thursday by saying it expects to make $3 billion, or 55 cents a share, in the first quarter ended last month — almost double the analyst consensus estimate.

Shares of Wells surged 30% to their highest level since January on the news, and the beaten-down shares of rivals followed.

Thursday's events don't erase the worries about the big banks, which center on the scope of loan losses as real estate prices plunge.

Still, Wells' numbers show that with competition having collapsed, plain vanilla banking — even mortgage banking — can be enormously profitable right now.

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