Earnings rise at Wells Fargo and US Bancorp

WELLS Fargo and US Bancorp said despite lending profits being squeezed by low interest rates, improving credit quality helped both banks post higher-than-expected fourth-quarter earnings.

The banks reported substantial improvements in nonperforming loans and reduced the funds set aside to cover bad loans.

Wells Fargo posted a 21 per cent increase in fourth-quarter profit, helped by an $850m (£532m) reserve release. The bank said earnings rose to $3.4bn, or 61 cents a share, meeting analysts’ expectations.

US Bancorp posted a 61 per cent jump in net income as the regional bank released $25m in loan loss reserves. The reserve release was its first since the financial crisis began in 2008. The bank’s earnings per share of 49 cents beat analysts’ average estimate by three cents.