(Reuters) – Wells Fargo said on Monday it will exit its correspondent banking business and reduce the size of its services portfolio to focus more on mortgages.
Mortgage lenders like Wells Fargo have seen demand for mortgages and refinances weaken as interest rates rise and homes become more expensive to buy.
As a result, the nation’s fourth-largest lender cut thousands of jobs in the national mortgage sector last year after aggressive expansion during the pandemic.
“We have decided to continue to de-risk our mortgage business by downsizing and narrowing our focus,” said Clever Santos, CEO of Consumer Finance. rice field.
The reorganization comes three days before the bank’s fourth quarter results. Analysts expect Wells Fargo’s earnings to fall 62 cents in the three months ending Dec. 31 from $1.25 a year ago, according to Refinitiv data.
The lender will also invest an additional $100 million to promote racial equality in home ownership, it said. (Reporting by Mehnaz Yasmin of Bangalore; Editing by Krishna Chandra Eluri and Maju Samuel )