Rising interest rates and a shrinking branch network are cutting into Wells Fargo’s mortgage business, and bank executives say they’re fine with that.
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With rising interest rates and a shrinking branch network cutting into its mortgage business, Wells Fargo’s credit card business brought in more revenue than home loans during the second quarter — and bank executives say they’re fine with that.
Wells Fargo generated $3.12 billion in second-quarter net income, down 14 percent from the first quarter and 48 percent from a year ago, the San Francisco-based bank reported Friday. Revenue declined to $17.03 billion, down 3.2 percent from quarter-to-quarter and 16 percent from a year ago.
Wells Fargo mortgage originations by channel
Wells Fargo mortgage originations by channel in billions of dollars Source: Wells Fargo investor presentations
Wells Fargo originated $34.1 billion in mortgages during the first three months of the year, down 10 percent from the first quarter and 36 percent from a year ago.
Originations made by Wells Fargo’s retail branches were down even more sharply falling 19 percent quarter-over-quarter and 47 percent year-over-year to $19.6 billion.
As of June 30, Wells Fargo operated 4,660 retail bank branches, 45 less than it had on March 31 and 218 fewer than at the same time a year ago.
The bank has also been shedding employees, with headcount falling by 2,904 during the second quarter and 15,522 over the last 12 months to 243,674.
Charles Scharf
When asked about the…