Wells Fargo said fourth-quarter earnings rose 13%, helped by growth in consumer and business lending, including its fast-growing subprime mortgage unit.
The San Francisco bank said net income rose to $2.18 billion, or 64 cents a share, from $1.93 billion, or 57 cents a share, a year earlier.
Revenue rose 11% to $9.41 billion, topping forecasts for $9 billion. Average loans rose an annualized 11% from the prior quarter, and net interest margin also increased. Expenses also rose 11%, to $5.41 billion.
Profit rose 9% to $1.51 billion from retail banking, 14% to $508 million from wholesale business banking, and 64% to $161 million at Wells Fargo Financial, which lends to less creditworthy people.
Wells Fargo is increasing its subprime home lending business even as most competitors cut back as delinquencies mount and intensifying competition drives down margins.
By the third quarter, Wells Fargo had become the largest U.S. subprime lender, according to National Mortgage News. It is also the No. 2 overall mortgage lender, after Countrywide
The company announced on Tuesday it sold its Latin American consumer finance unit to a Bear Stearns' private equity arm for an undisclosed price.
In November, the company said it would acquire factoring company EFC Partners for an undisclosed amount.