2008-04-16 — cnn.com
It marked Wells Fargo's second straight quarter of earnings erosion -- the fallout from a deepening morass of home loans that aren't being repaid amid the worst real estate slump in decades.
Still, Wells Fargo is holding up better than most of big banks, which are either suffering huge losses or posting much steeper declines in their quarterly profit.
Wells Fargo also fared better than analysts anticipated. Analysts polled by Thomson Financial expected earnings of 57 cents per share for the quarter.
Wells Fargo's problems are primarily rooted in its $84 billion portfolio of home equity loans made to borrowers looking to draw on the value of their property to pay bills or indulge themselves. The bank is trying to sell $12 billion of its most troublesome home equity loans.
They are delaying their writedowns and reckoning expectations of cash flow from marginal loan varieties, as our coverage has been tracking.
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