Wells Fargo said Wednesday it swung to a fourth quarter loss of about $2.6 billion, hurt by credit write-downs to reduce the need for future loan loss provisions on Wachovia Corp's risky assets.
Wells Fargo said it lost $2.55 billion in the fourth quarter or 79 cents a share, compared with a net income of $1.36 billion or 41 cents a share in the same period of 2007. It didn't include Wachovia's results.
The bank also said today that Wachovia -- which it acquired on December 31 -- lost $11.17 billion in the fourth quarter due to loan losses and investment write downs.
However Wells Fargo said it will keep its dividend of 34 cents a share and stated it has no plans to ask for further help from the Treasury Department’s Troubled Asset Relief Program or TARP, which previously invested $25 billion in capital.
Shares of Wells Fargo were up 20 percent in early trading Wednesday.
Wells Fargo also said it has reduced the risk in the balance sheet of the newly combined company. It took $37.2 billion in credit write-downs at Wachovia as of Dec. 31 through purchase accounting adjustments on $93.9 billion of high-risk loans segregated in Wachovia's loan portfolio, Marketwatch reported.