Net income at the $103.7 billion-asset Norwest rose to $393 million, or 50 cents a share. The Minneapolis company, which is scheduled to merge with San Francisco-based Wells Fargo & Co. in the fourth quarter, cited strengths in mortgage, trust, and credit card businesses as well as service charges on deposit accounts.

Norwest said it improved earnings in all three of its major business groups. The banking group earned $281 million, up 10.5% from the 1997 quarter. Mortgage banking earned $56 million, up 49% despite losing money in mortgage servicing. Consumer finance increased 13% to $55.5 million.

Chairman and chief executive officer Richard M. Kovacevich said Norwest is in good position for the merger. "We are confident our combined company will continue to deliver consistently superior financial performance," he said.

Net interest income rose 9% to $1.1 billion, primarily due to an increase in loans. Noninterest income rose 18% to $890 million.

Norwest net loan losses jumped 23% to $155 million, much of that related to the acquisition of subprime lender Fidelity Acceptance Corp.

Still, analysts said the consumer chargeoffs paled next to the losses faced by banks with international business exposure. "Norwest is not into the things that are causing problems for the banking industry," said Ben Crabtree, an analyst with Dain Rauscher Inc.

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