Wells Fargo Q2 profits zooms 81% to $3.17 bn

Financial services entity Wells Fargo posted 81 per cent surge in profits to $3.17 billion for the three months ended June 30, even as credit losses continued to climb during the quarter.

The company has reported second quarter profits of $3.17 billion, 81 per cent up compared to the same period a year ago. In the comparable period, the same stood at $1.75 billion, it said in a statement today.

For the second quarter, revenues shot up to $22.51 billion, boosted by relatively good performance in wholesale banking division against $11.46 billion in the year-ago period.

Wells Fargo is the latest to come up with robust quarterly results, following better-than-expected performance by rivals Goldman Sachs, JPMorgan Chase and Citigroup.

However, the allowance for credit losses, including the reserve for unfunded commitments, totalled $23.5 billion at June 30, 2009, compared to $22.8 billion in the first quarter ended March 31.

The company had snapped Wachovia late last year, which also helped in reporting better quarterly results.

"Our very strong growth in revenue, deposits and net income this quarter and the first half of this year demonstrates that the combined Wells Fargo-Wachovia has significant power to generate capital internally," Wells Fargo's President and CEO John Stumpf said.

"Our Wachovia team members also contributed significantly to our results this quarter and the first half of the year, generating 39 per cent of consolidated second quarter revenue," Stumpf noted.

According to the company, the integration with Wachovia is on track.

To tide over the financial turmoil, Wells Fargo had received $25 billion from the US Federal government.

"We intend to pay back the government's investment in Wells Fargo on behalf of US taxpayers in a shareholder-friendly way. We will work closely with our regulators to determine the appropriate time to repay the funds while maintaining strong capital levels," Stumpf said.