By Peter Rudegeair and Amrutha Gayathri
(Reuters) - Wells Fargo & Co, the fourth largest U.S. bank by assets, reported a slight increase in quarterly profit on Wednesday as it earned more from credit cards and corporate loans.
Credit cards, one of Wells Fargo's major areas of expansion, were a bright spot as fees rose 12 percent to $925 million. Outstanding balances increased 16 percent to $31.1 billion, after its purchase of the loan portfolio of Dillard's Inc.
Commercial and industrial loans jumped 15 percent to $271.8 billion, much of it coming from an increase in lending to other financial companies, including $6.5 billion in loans to finance the sale of a Wells Fargo student loan portfolio to Navient Corp. That sale resulted in a $217 million gain for the bank in the quarter.
Net interest income, a measure of overall profit from lending, was up 3.5 percent to $11.2 billion from the same period a year earlier due to growth in loans as well as more income from investments and trading assets. Core loans were up 8 percent from the fourth quarter of 2013.
Total net income for common shareholders was $5.38 billion, or $1.02 per share, for the quarter, up incrementally from a year earlier and in line with estimates from analysts polled by Thomson Reuters I/B/E/S.
Wells Fargo, the largest U.S. mortgage lender, reported a 4 percent fall in income from that unit. The bank made $44 billion in home loans in the quarter, 12 percent less than a year ago and a bigger drop than the one reported by rival JP Morgan Chase & Co.
Net interest margin, a profit measure tied to a bank's lending, fell to 3.04 percent from 3.27 percent a year earlier.
Wells Fargo's shares were down 1.1 percent to $51.30. The bank's stock jumped by 21 percent in 2014, triple the rise of the KBW index of bank stocks.
(Reporting by Peter Rudegeair in New York and Amrutha Gayathri in Bengaluru; Editing by Kirti Pandey and Jeffrey Benkoe)
