Despite multi-billion losses Wells Fargo became the strongest bank in 2008

Wells Fargo & Company has issued today its Q4 and full year report. The bank has stated that its Q4 loss amounted to $2.55 billion, $0.79 per share after significant de-risking and merger-related actions were taken. Full year net income amounted to $2.84 billion, $0.75 per share. As for Wachovia, which has been acquired by Wells Fargo on December 31, 2008, its losses exceeded $11 billion, including $2.8 billion deferred tax asset write-down, $4.2 billion credit reserve build and $4.3 billion of market disruption losses.

Other highlights of Wells Fargo’s year report:

• Record revenue of $42.23 billion, up 7 percent from prior year
• Positive operating leverage (revenue growth of 7 percent; expense decline of 1 percent), best among large bank peers
• Net income of $2.84 billion, including $8.14 billion (pre tax) credit reserve build, $1.68 billion (pre tax) other-than-temporary impairment and $124 million (pre tax) of merger-related expenses
• Diluted earnings per share of $0.75, including credit reserve build ($1.51 per share) and other-than-temporary impairment ($0.31 per share)
• Industry-leading annual results – highest growth in pre-tax pre-provision earnings (up 18 percent), highest net interest margin (4.83 percent), return on equity, return on assets and highest total shareholder return among large bank peers (up 2 percent)

“Despite the unprecedented contraction in the credit markets, we remained ‘open for business’ and continued to lend to credit-worthy customers. We made $106 billion in new loan commitments during 2008 to consumer, small business and commercial customers and originated $230 billion of residential mortgages. The decline in profitability was caused by adding $8.1 billion to credit reserves, which included a $3.9 billion provision to conform reserve practices of both Wachovia and Wells Fargo. We did make some mistakes, but, for the most part, we maintained our credit discipline. We understood our customers’ financial needs. As a result, our company at year-end 2008 was one of the world’s strongest financial institutions,” said President and CEO John Stumpf.

He also added that their bank has no plans to ask request additional capital under the TARP. 

For more information please see the file attached. 

Source: Wells Fargo via Business Wire