Wells Fargo & Co.'s third-quarter profit jumped 13% as a decline in revenue from mortgage lending was offset by reduced expenses and fewer soured loans.
Net income increased to $5.6 billion in quarter ended Sept. 30 from $4.9 billion a year earlier. Revenue dipped to $20.5 billion from $21.2 billion, coming in below the analysts forecast of $21.1 billion.
The bank controls almost a third of the U.S. mortgage market. Much of its lending business has been coming from mortgage refinancing, which was reduced by the spike in interest rates.
Fewer bad loans in an improving housing market cut Wells Fargos lending losses to $975 million from $2.4 billion in the third quarter of 2012.
The bank reduced expenses to $12.1 billion, down $153 million from the second quarter. The savings were mainly due to reduced employee bonuses and legal costs.
Wells Fargo reports it will be in a strong position with its variety of businesses to survive the economys move to higher interest rates. Strong revenue growth is coming from credit cards, personal credit management and retirement services, bank officials report.
