At Goldman, quarterly profit dropped 53%, while Wells Fargo reported a 21% jump. 

    Goldman Sachs Q4 Reports.   There was a slowdown in many of Goldman's divisions this last quarter;  earnings dropped 53% to $2.39 billion, or $3.79 a share.  According to CFO David Viniar, the revenue slowdown came amid client uncertainty about the economy and regulatory reform.  With client activity down, fees dropped, too. 

Revenue in its powerful fixed income, currency and commodities unit, known as FICC, fell 48% to $1.64 billion, from the 2009 period, while investment revenue - equity and debt underwriting - fell 10% to $1.51 billion.

One should not forget that Goldman had a rough Q3 as well, as political and economic uncertainties weighed heavily on the firm. Goldman said its Q3 earnings had slumped 40% to $1.9 billion, or $2.98 a share, compared with $3.19 billion, or $5.25 a share, in the period a year earlier.

For further details, go to:  [NYT Dealbook, 1/19, Goldman Earnings]

    Wells Fargo Q4 Reports.   Q4 earnings rose 21%, helped by an improving loan portfolio and a release of its reserves.  As one of the nation’s biggest banks and the largest lender to consumers, Wells Fargo saw revenue fell, in part on new federal regulations that restrict the size of overdraft fees banks can charge on checking accounts. Still, the bank generated revenue growth in roughly 2/3's of its businesses since the prior quarter.

"As the U.S. economy showed continued signs of improvement, our diversified model continued to perform for our stakeholders, as demonstrated by growth in loans and deposits, solid capital levels and improving credit quality." -- Chairman, CEO John Stumpf. 

Despite its heavy hand in the lending industry, which has been shellacked by losses for 3 years, Wells has quietly emerged from the financial crisis as one of the nation’s strongest banks. 

Yet the bank still faces lingering problems stemming from its mortgage portfolio – and its 2008 acquisition of the troubled lending giant Wachovia.  Earlier this month, the high court in Massachusetts ruled against Wells Fargo and US Bancorp in an important foreclosure case that could have ramifications for the entire banking industry.  The state Supreme Judicial Court ruled the banks had wrongly foreclosed on two homes, because they could not prove they owned the mortgages.

The industry has been closely watching this case, as many homeowners are challenging foreclosures brought by banks without proper documentation. Regulators in all 50 states have begun investigations into whether hundreds of thousands of foreclosures made in recent years were invalid.

Yet analysts and industry lawyers say this litigation will not affect Wells as strongly as JPMorgan or others, because Wachovia rarely sold its mortgages to investors.   [NYT Dealbook, 1/19]