With strong results from its wealth management businesses, Well Fargo reported double digit revenue growth from a year earlier following its integration with Wachovia Corp.
John Stumpf, Wells Fargo's chief executive officer, said during its quarterly earnings conference call Wednesday that the merger, which took place Dec. 31, 2008 and essentially doubled the size of Wells Fargo, “has already generated tremendous synergies.”
Wells Fargo is now the fourth-largest bank by assets in the United States with $1.2 trillion as of Dec. 31, though Stumpf emphasized that Wells Fargo’s “goal is never to become bigger for the sake of being number one.”
The company has also managed to pay back a $25 billion bailout it received from the Troubled Assets Relief Program.
Wells Fargo posted net income of $2.8 billion in the fourth quarter, or 8 cents a share, beating analysts’ estimates of a loss of 1 cent a share, on record revenue of $22.7 billion dollars, up 4% from the third quarter.
The revenue increase was largely due to continued growth in fee income in its trust and investment management, credit/debit card and mortgage banking businesses, according to the company, as well as gains from the Wachovia merger.
“We also experienced broad-based growth across multiple businesses, including double-digit (annualized) linked-quarter revenue growth in asset management, auto lending through Wachovia Dealer Services, insurance, merchant card, mortgage banking, and wealth management,” the company said.
For the full year, Wells Fargo said it had net profit of $7.99 billion on record revenue of $88.7 billion.
Wells Fargo’s wealth, brokerage and retirement business segment reported net income of $131 million, down from $244 million in the prior quarter, due in part to the reserve incurred in connection with an auction rate security settlement.
Revenue was $2.9 billion, a slight decrease from the prior quarter, as higher asset-based revenues were offset by lower securities gains in the brokerage business.
Average core deposits increased $8.0 billion, or an annualized 27% from the third quarter, as the company attracted more client assets and deposits. Private banking revenue rose 7% from prior quarter on continued strong deposit growth.
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