Profit at Wells Fargo rose by a better-than-expected 13% in the third quarter, as the mortgage lender made up for a decline in that business by releasing a large chunk of money set aside for bad loans.
Reuters reports that home refinancings, which had been a profit centre over the past few quarters for the bank, slowed as anticipated, and many of its 89 other businesses did not improve enough to make up the difference.
Both interest and fee income fell slightly from year-earlier levels.
An improving economy meant more people paid their bills and the bank was able to release $900m of reserves for credit losses, its largest since the second quarter of 2011.
But some investors worried whether Wells Fargo can overcome the slowdown in mortgage activity after the release of reserves runs its course.
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