Firm sees earnings rise
Wells Fargo on Friday reported a 22 percent increase in quarterly earnings on improving credit quality, but said its pipeline of new mortgages was slowing. Net income for the quarter rose to US$5.2 billion on US$21.3 billion in revenues, compared with US$4.2 billion on revenues of US$21.6 billion in the year-earlier period. The bank, the largest US mortgage originator, reported improving credit quality as the housing market steadies. Wells Fargo reduced its provision expense to US$1.2 billion in the quarter, from US$2 billion in the year-earlier quarter. The bank’s non-performing assets declined to US$22.9 billion, compared with US$26.6 billion a year ago. The San Francisco banking giant reported US$800 billion in loans outstanding, up US$33.5 billion from the year-ago quarter.
Greifeld bonus halved
NASDAQ OMX Group CEO Robert Greifeld, who came under fire for Facebook’s botched initial public offering last year, had his bonus cut by more than half last year, but his overall compensation for the year still rose 11 percent. Greifeld received compensation totaling US$8 million, according to an Associated Press analysis of the New York company’s annual proxy filing. That is up from US$7.2 million in 2011. Greifeld’s salary for last year was US$1 million, the same as in 2011. His performance-based cash bonus dropped 62 percent to US$1.4 million, but was offset by a more than doubling of his stock awards to US$5.6 million. Payments in the form of perks fell 16 percent to US$77,742.
JAB to buy coffee firm
German investor Joh A Benckiser (JAB) is to buy the owner of Douwe Egberts coffee in a 7.5 billion euro (US$9.8 billion) deal to create a global hot drinks empire aimed at taking on market leaders Nestle and Mondelez International. D.E. Master Blenders 1753, the Dutch owner of Douwe Egberts coffee and Pickwick tea, said on Friday it had reached conditional agreement on a 12.50 euros per share cash takeover offer from a group of investors led by JAB. JAB, the investment vehicle of the billionaire Reimann family, has been building a hot drinks business in a bid to tap strong growth driven by new products, such as single-serve coffee brewers, and demand from emerging markets.
US sales in March contract
US retail sales contracted last month for the second time in three months and consumer confidence tumbled this month, a sign tax hikes early this year stole momentum from the economy. Sales fell 0.4 percent last month, missing analysts’ expectations for a flat reading, US Department of Commerce data showed on Friday. The data suggests consumer spending was considerably weaker in the first quarter than analysts previously believed, and many cut economic growth forecasts for the period. Prior reports had made consumers look relatively resilient despite an increase in tax rates in January on most Americans. “The payroll tax increase is hurting,” said Ian Shepherdson, an economist at Pantheon Macroeconomic Advisors in White Plains, New York.