Wells Fargo Investment Banking Revenue Climbs 37% (Correct)
Corrected to make clear that fees from the Heinz deal have yet to be recorded
NEW YORK ( TheStreet) -- Wells Fargo
A 37% rise in revenue from Wells Fargo's investment banking unit proved to be the highest among all of the bank's reported segments, outperforming a slight drop in interest-based income from loans and rising far-faster than fees earned by originating and servicing mortgages.
Overall, the bank reported $353 million in investment banking income for the first quarter, helping to drive a slight year-over-year gain of the bank's fee-based revenue. Wells Fargo reported $10.8 billion in fee based income, a negligible rise from year-ago levels.
Although investment banking income represents just under 2% of the bank's revenue, it indicates Wells Fargo's emergence as a Wall Street player with relationships that can help it steal business from mainstays such as Goldman Sachs
The bank also benefited from a deal to advise and finance Berkshire Hathaway and 3G Capital's $28 billion acquisition of ketchup maker Heinz
Only Wells Fargo and JPMorgan
Through Buffett's business and the acquisition of Wachovia Securities in 2008, Wells Fargo appears to be a burgeoning Wall Street player, something that likely is a surprise to the larger banking community.
According to data provider Dealogic Wells Fargo held a top-10 revenue share in the global investment banking business in the first quarter of 2013, surpassing standalone firms like Jefferies and international conglomerates such as HSBC
On a conference call detailing Wells Fargo's record $5.2 billion quarterly profit , Sloan referenced a 37% rise in investment banking income as evidence of the bank's diversification and its growth prospects.
Wells Fargo also said on the conference call it would be unlikely to get into the M&A game itself in any mega deals.
The San Francisco-based lender reported better-than-expected earnings of $5.2 billion, on revenue of $21.3 billion, generally beating estimates of $4.75 billion and $21.5 billion respectively.
Adjusted first-quarter earnings of 92 cents a share beat the consensus estimate of 88 cents, according to analyst forecasts compiled by Bloomberg.
Wells Fargo shares fell over 1% to $37.15 in Friday afternoon trading.