Wells Fargo Committed to Expense Cuts

Wells Fargo & Co. on Friday reiterated its plans to slash costs over the next year -- but executives gave themselves new wiggle room to rethink those cuts later.

"We are absolutely committed" to the expense cuts, Wells Chief Executive John Stumpf told analysts during a conference call Friday. "But if we get to the fourth quarter and if for whatever reason there is all kinds of revenue available in a certain business or a number of businesses, we are not going to be slavish to any one number."

The San Francisco bank – the nation's largest residential lender and servicer – said its first-quarter expenses rose to $13 billion, up from $12.5 billion in the previous quarter and $12.7 billion a year earlier. The company had previously predicted that expenses would remain elevated in the first quarter, and now says that costs will fall an estimated $1.7 billion over the remainder of the year, making its fourth-quarter expenses an estimated $11.25 billion.

That is at the higher end of a target Wells had previously disclosed for its expenses. The bank in January said it wanted its fourth-quarter expenses to be between $10.75 billion and $11.25 billion.

Wells expects to cut costs now that it has finished integrating the operations of Wachovia, which it bought in 2008. It also expects to make additional cuts from lower personnel and litigation costs and other cost-savings initiatives.

The bank on Friday reported a profit of $4.25 billion in the first quarter, up from a year-earlier profit of $3.76 billion. Revenue increased 6.4% to $21.64 billion, the company's highest revenue in nine quarters.