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.