Monday, October 15, 2012

Wells Fargo & Company (NYSE:WFC), JPMorgan Chase & Co.(NYSE:JPM) report record quarterly profits

Results from the country's two largest mortgage lenders showed that some positive sentiments may be returning to the housing market, though it is still debatable whether the trend is long term.

Wells Fargo & Company (NYSE:WFC) and JPMorgan Chase & Co.(NYSE:JPM) on Friday put out figures that showed a surge in home loans and record profits.

Wells Fargo said it issued $139 billion in mortgages from July through September, compared with $89 billion in the same period last year.

JPMorgan wrote $47 billion in mortgages, compared with $37 billion last year.

JPMorgan reported a profit of $5.3 billion in the third quarter, up 36 percent from the same period a year ago.

It worked out to earnings of $1.40 per share, surpassing the $1.21 predicted by analysts.

Revenue rose 6 percent to $25.9 billion, beating expectations of $24.4 billion. Besides the higher mortgage revenue, earnings of the bank were also helped by lower provisioning for bad loans, lower expenses while it also got revenues from higher credit card use and investment banking fees.

Wells Fargo reported a profit of $4.7 billion in the third quarter, up 23 percent from the same period a year ago. That translated into earnings of 88 cents per share, a penny higher than estimates.

Overall revenue rose 8 percent to $21.2 billion, slightly lower than analysts expected.

Shares in JPMorgan fell about 1 percent, losing 48 cents to $41.62, while Wells Fargo's stock fell more than 2 percent, losing 93 cents to $34.25.

The CEOs of both institutions said that the mortgage market had turned the corner and there were improvements every quarter.

However a good portion of the mortgage lending was due to owners refinancing mortgages and not due to fresh homes being bought.

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