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Citing higher credit and debit card purchase volumes and growing card penetration within its customer base, Wells Fargo & Co. today announced that it earned $923 million in card fees during the second quarter ended June 30, up 57% from $588 million a year earlier. Wells reported a charge-off rate of 11.6% on consumer credit cards, up 579 basis points from 6.95% during last year's second quarter. "While losses on credit cards remain elevated, the business remains profitable," Howard Atkins, Wells senior vice president and chief financial officer, said in prerecorded comments about the bank's earnings. Opportunities exist to increase the company's card-penetration rate because 15% of former Wachovia customers have one of Wells' cards, compared with 36% penetration among legacy Wells customers, he noted. Wells "did not engage in any of the practices" banned by the recently passed Credit Card Responsibility, Accountability and Disclosure Act, Atkins said, noting that complying with other aspects of the act will "likely result in further credit tightening and general increases in the cost of consumer credit." Wells Fargo & Co. reported record net income of $3.2 billion for the second quarter, up 82.9% from $1.75 billion during the same quarter a year ago. Revenue climbed 96.3%, to $22.5 billion from $11.46 billion. Wells says Wachovia Corp., which it acquired last year, contributed 30% of its consolidated revenue.
