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Wells Fargo dips as mortgage fall hits bottom line

WELLS Fargo’s first quarter profit dropped slightly yesterday as it originated fewer mortgages.

The fourth-largest US bank, whose shares dipped nearly two per cent, said profit for common shareholders fell to $2.37bn (£1.5bn), or 45 cents per share, from $2.38bn, or 56 cents per share, a year earlier.

Analysts on average expected earnings of 42 cents per share, according to Thomson Reuters.

The bank reported a 25 per cent decline in mortgage originations, largely due to a dip in refinancing activity.

Like other US banks that reported earlier this month, Wells Fargo said that while demand for new loans was weak, losses on existing loans were easing.

“We believe that credit at Wells Fargo has turned the corner,” chief financial officer Howard Atkins said in a statement.

Credit losses fell $83m in the first quarter to $5.3bn, the bank said.

Revenue increased two per cent to $21.5bn from $21bn.

The company’s shares were down 1.9 per cent at $33.05 in pre-market trading. At Tuesday’s close, the stock had climbed almost 30 per cent since the start of the year.