Wells Fargo profit slips as loan provisions jump

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[January 15, 2016]  (Reuters) - Wells Fargo & Co, the biggest U.S. residential mortgage lender and a major lender to the energy industry, reported a 0.8 percent fall in profit for the last quarter of the year as it set aside more money to cover bad loans.

The San Francisco-based bank's net income applicable to common shareholders slipped to $5.34 billion, or $1.03 per share, in the three months ended Dec. 31, from $5.38 billion, or $1.02 per share, a year earlier.

Analysts on average had expected earnings of $1.02 per share, according to Thomson Reuters I/B/E/S.

Wells Fargo's shares, which fell about 1 percent in 2015, were down 2.9 percent in premarket trading on Friday.

Mortgage banking revenue rose 9.6 percent to $1.66 billion, the first rise in three quarters.

However, provisions for credit losses jumped 71.3 percent to $831 million in the period compared with a year earlier.

The bank's total loans grew 6.3 percent in the quarter, with the acquisition of GE's commercial lending and leasing assets alone adding about $32 billion to the bank's portfolio.

Net interest income, a measure of the interest received from loans after paying for funding and accounting for potential loan losses, rose 0.58 percent to $10.76 billion.

(Reporting by Sruthi Shankar and Richa Naidu; Editing by Ted Kerr)

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