Wells
Fargo 3Q earnings rise on growth of loan book
With increased mortgage lending and
higher collection of fees, Wells Fargo & Company (NYSE:WFC) has posted
record earnings in the third quarter. The bank issued more loans and also
collected more interest on loans, compared to the same period last year. However,
lower-than-expected revenue sent share prices tumbling 3 percent before opening
bell.
The bank issued $139 billion of mortgage
loans compared to only $89 billion in the third quarter last year. Net income
for the quarter increased by 23 percent to $4.72 billion compared to last
year’s $3.84 billion. Earnings per share were 88 cents against analyst
expectations of 87 cents. Last year, the earnings had been 72 cents a share. Revenue
for the period rose 8 percent to $21.21 billion. This was slightly lower than
analysts’ estimates.
While net interest income rose by 1
percent, non-interest income which includes insurance and mortgage banking
revenue and fees increased 16 percent.
The stock fell 3 percent to $34.10.
On Tuesday, the federal government had
filed a suit against Wells Fargo, accusing it of misleading regulators about
the quality of several thousand loans for qualifying for federal loan
insurance.
U.S.
Government to investigate allegations against CVS Caremark
According to a Los Angeles Times report,
the U.S. Government is looking into allegations that CVS Caremark
Corporation(NYSE:CVS) refilled descriptions and submitted insurance claims to
Medicare, the U.S. Health program for the elderly and disabled, without taking
approval of the patients. An official who was not named said that the Inspector General for the U.S. Department
of Health and Human Services had launched an investigation. This
department is in charge of looking into potential Medicare fraud. Officials of the
Department and CVS Caremark could not be reached.
An earlier probe which had continued for
four years had ended in January when CVS Caremark had agreed to pay $5 million
to settle charges made against it for incorrect pricing of drugs for the
elderly and disabled.
Shares of CVS slid 1% to $47.13.
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