NEW YORK – A deluge of banks earnings on Tuesday took the pulse of the industry at a time growing mortgage and credit woes were forcing banks to charge off more loans or raise reserves against future defaults. Rising core deposits and loans boosted first-quarter income at Wells Fargo & Co. 11 percent, despite growing problems in its subprime mortgage portfolio. Washington Mutual Inc. reported a 20 percent drop in earnings and the second consecutive quarterly loss in its housing division on subprime mortgage write-downs. The earnings still beat analysts’ estimates, however. Wells Fargo, the nation’s fifth largest bank, said that deterioration in subprime mortgages forced it to slash revenues by some $90 million as it wrote down those loans and set aside money for defaults. Subprime mortgages are loans to borrowers with blemished credit or low credit scores. Wells Fargo posted first-quarter profit of $2.24 billion, or 66 cents per share, up from $2.02 billion, or 60 cents per share, a year earlier. Revenue at the San Francisco-headquartered bank was $9.44 billion in the quarter, up more than 10 percent from $8.56 billion a year earlier. Borrowers’ problems showed up in the bank’s report that credit losses totaled $715 million in the first quarter, up from $533 million a year earlier. Washington Mutual Inc., the nation’s largest thrift, said its net income was $784 million, or 86 cents a share, in the first quarter, down from $985 million, or 98 cents per share, a year earlier. Revenue in the January-March period, including net interest income and noninterest income, was $3.62 billion. Kerry Killinger, Washington Mutual’s chairman and chief executive, the home loan market – particularly the subprime segment for consumers with high-risk credit histories – remained a serious challenge. The Seattle-based institution said its home loan group lost $113 million in the first quarter, slightly less than the $122 million loss registered in the fourth quarter, mainly on write-downs of subprime mortgage loans. It also said that subprime mortgage production was 51 percent lower in the first quarter than a year ago. 160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set!
The spending by Premier League clubs in the current transfer window is unsustainable, Tottenham Hotspur chairman Daniel Levy said on Tuesday.English top-flight teams have splashed out more than $1 billion since the end of last season but Spurs, runners-up to Chelsea in May, have not yet added to their squad.”Some of the activity that is going on at the moment is just impossible for it to be sustainable,” Levy said in New York.”We have a duty to manage the club appropriately. Somebody spending 200 million pounds more than they’re earning, eventually it catches up with you.”Spurs, who sold England right back Kyle Walker to Manchester City for 45 million pounds ($58.63 million) this month, are building a new 61,000-seater stadium, which is scheduled to open next year.”We have to find the right balance but I can honestly say it (the stadium) is not impacting us on transfer activity because we are not yet in a place where we have found a player that we want to buy who we cannot afford to buy,” Levy said.”Our position on transfers is that we have a coach who very much believes in the academy, so unless we can find a player that makes a difference we would rather give one of our young academy players a chance.”Manchester United manager Jose Mourinho said the transfer spending by their rivals in the current window is “out of control”, despite the club reportedly spending over 100 million pounds.British media reports say United have spent over 100 million pounds ($130.22 million) on players in adding striker Romelu Lukaku and defender Victor Lindelof to their squad.advertisementUnited’s cross-town rivals City have spent over 200 million pounds ($260.44 million), according to British media reports, on defenders Walker, Benjamin Mendy and Danilo, midfielder Bernardo Silva and goalkeeper Ederson.League title holders Chelsea have also spent heavily on players in the current window and have added striker Alvaro Morata from Real Madrid for a club record fee.Every club is getting good players, every club is investing a lot and some clubs are paying too much and by paying too much they create a very strange and out of control market,” Mourinho told the BBC.”But this is the reality now.”It is obvious that nowadays, especially for the strikers, the amount of money is amazing.”($1 = 0.7679 pounds)