Drop in Wells Fargo's net interest margin
Wells Fargo suffered a sharper than expected decline in its net interest margin in the fourth quarter, increasing concerns about the impact of the US Federal Reserve’s ultra-low interest rate policy and sparking a sell-off in bank stocks.
Shares in the biggest US bank by market value fell more than 1 per cent in morning trading in New York even though it reported net income of $5.1 billion (€3.82 billion) for the final three months of 2012. Bank of America, Citigroup and JPMorgan Chase – which all report earnings next week – also fell.
Investors are worried about how banks can make money in the current ultra-low interest rate environment.
Squeezed by low US interest rates, Wells’s net interest margin fell 0.1 per cent to 3.56 per cent – a bigger decline than expected. – (Copyright The Financial Times Limited 2013)