WFC

Wells Fargo fourth-quarter profit jumps on cost cuts

Credit: REUTERS/Stephanie Keith

Adds revenue, details and context throughout

Jan 12 (Reuters) - Wells Fargo's WFC.N profit jumped in the fourth quarter as the lender benefited from cost cuts.

Net income rose to $3.45 billion, or 86 cents per share, for the three months ended Dec. 31, the lender said on Friday. That compares with $3.16 billion, or 75 cents per share, a year earlier.

As the Federal Reserve raised interest rates, banks benefited by charging borrowers more for interest. With market participants forecasting rate cuts this year, banks' interest income could start to erode.

Conversely, lower rates could tempt more consumers to take out loans, boosting another key source of income for banks.

Revenue in the fourth quarter rose 2% to $20.5 billion.

However, Wells Fargo is still operating under an asset cap that prevents it from growing until regulators deem it has fixed problems from a fake accounts scandal.

The bank still has nine open consent orders from regulators mandating additional oversight of its practices.

Wells Fargo is among a group banking giants that are required to refill a government insurance fund that was drained of $16 billion after three regional lenders collapsed.

(Reporting by Noor Zainab Hussain and Manya Saini in Bengaluru and Carolina Mandl in New York; Editing by Arun Koyyur)

((Manya.Saini@thomsonreuters.com;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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