ANCHOR QUESTION OFF-CAMERA (ENGLISH) SAYING:

These (Wells Fargo) numbers as I said beat expectations, what drove their profits?

ERIK OJA, BANK ANALYST, S&P CAPITAL IQ (ENGLISH) SAYING:

Profits were driven by mortgage banking and by loan growth. Mortgage banking hit a record of $3.1 billion in a quarter, up from about $2.9 billion in the third-quarter which was very strong. And loan growth was very strong as well, up 2% from the third-quarter and up nearly 3% from a year ago.

ANCHOR QUESTION OFF-CAMERA (ENGLISH) SAYING:

So on the surface it sounds like they're hitting it out of the ballpark but the stock was down. There are some problems actually under the surface...?

ERIK OJA, BANK ANALYST, S&P CAPITAL IQ (ENGLISH) SAYING:

Sure, two things, one, expectations were high. They were expected to bat 400 and they batted about 350. And in addition, one of the main problems with Wells Fargo is the net interest margin, which is the profit that they make on their investment securities and loans held for investment. That margin continues to fall every quarter, this quarter it fell ten basis points and that's because they're making less money on their securities that they hold for investments and they have a flood of deposits coming in. They just can't put enough of it to work and that depresses the net interest margin.

ANCHOR QUESTION OFF-CAMERA (ENGLISH) SAYING:

So it's kind of ironic, they have a lot of money to invest and yet they can't make money on the money...?

ERIK OJA, BANK ANALYST, S&P CAPITAL IQ (ENGLISH) SAYING:

Sure, because U.S. economic growth is still sluggish and loan demand is just not there. They need to increase loans more. I mean, they had strong loan growth in this fourth quarter but they need to increase loan growth even more to put those deposits to work and build the net interest margin.