Clawing back compensation is a big deal for the banking industry but absolutely appropriate, Wells Fargo CFO Timothy Sloan told CNBC’s “Closing Bell” on Friday.
“Our shareholders should expect that we’re going to continue to operate this business in an appropriate way and if it turns out we don’t, action should be taken,” Sloan said.
Sloan spoke after JPMorgan became the first major company toclaw back pay from senior executives linked to the nearly $6 billion dollars in trading losses at its chief investment office.
Turning to earnings, the country’s fourth-largest bank postednet income of $4.6 billion, or 82 cents a share, compared with $3.9 billion, or 70 cents a share, a year earlier on strength in its mortgage business.
“Our originations were flat quarter over quarter,” Sloan noted, “but we ended the quarter with a pipeline that was up 29 percent from the prior quarter.”
Highlighting the diversity of the business, Sloan said that mortgages weren’t the primary driver of earnings either.
In addition to mortgages, Wells Fargo posted a 17 percent increase in profit on “nice loan growth — both organically and through acquisition — in wholesale and consumer businesses,” he said. “We had good fee growth in our wealth, brokerage and retirement business: Deposits were strong, expenses were down $600 million and credit was good.”
Expenses peaked in the fourth quarter of 2010, and Sloan’s expectation is that they will continue to decrease over the next few quarters.
Sloan also said Wells Fargo can continue to increase revenues and earnings for the rest of the year. But when asked about getting bigger, Sloan said: “It’s very unlikely that we would be purchasing another bank in the U.S.”