A year after announcing it would buy Charlotte's Wachovia, Wells Fargo reported a third consecutive quarter of strong earnings.
The San Francisco bank announced Wednesday that it made $2.6 billion from July through September, helped by strong mortgage revenue and better-than-expected savings from Wachovia. But analysts also cautioned that Wells' troubled loans were on the rise.
Profits were driven by a broad range of consumer businesses in addition to mortgages: Savings deposits and debit cards, which usually perform better in a recession, were strong. Auto lending got a boost from the government's Cash for Clunkers program.
Wells praised the contributions from Wachovia, which it bought Dec. 31 as the Charlotte bank teetered near collapse. It said expenses for integrating Wachovia are down, largely because it's spending less on severance because workers are leaving through attrition. The cost of trimming office space is also less than expected, because the bank has been able to rent out some offices to third-party tenants.
Wells continues to cut jobs as it integrates Wachovia, with the losses coming for employees at both banks. Wells hasn't given details about what those jobs might be or where, except to say it will cut positions that duplicate each other.
In an interview with the Observer, chief financial officer Howard Atkins said the cuts will continue "for the next year or two."
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