Wells Fargo soars 33 percent as results ease fears

The bank said its new policy of writing off home equity loans where payments were more than 180 days late, rather than 120, resulted in the deferring of $265 million of charge-offs.

Fee income from mortgage banking rose 74 percent to $1.2 billion, despite a 21 percent decline in loan originations. Insurance fees jumped 27 percent to $550 million, while credit card fees rose 14 percent to $588 million.

"OPPORTUNITIES TO GROW"

"The credit crisis is giving us plenty of opportunities to grow," Chief Financial Officer Howard Atkins said in an interview.

He said the bank is probably adding market share in middle- market commercial banking, retail mortgages, and mutual funds and asset management.

Net interest margin, the difference between what the bank earns on loans and pays on deposits, rose to 4.92 percent from the first quarter's 4.69 percent, and from 4.89 percent in last year's second quarter.

Profit fell 18 percent to $1.23 billion from retail banking, and 10 percent to $557 million in wholesale business banking. Wells Fargo Financial, which lends to less credit-worthy people, generated a $38 million loss.

The bank said it sells an average 5.6 products to each retail customer and a record 6.3 to each business customer, a result of its key strategy of "cross-selling" multiple products for each customer.

Wells Fargo's Tier-1 capital ratio, which measures its ability to cover losses, rose to 8.24 percent from 7.92 percent at the end of March. Regulators consider 6 percent sufficient.

The bank said it has about 3,318 branches in 23 U.S. states, and $609.1 billion in assets.

(Editing by Brian Moss Editing by Andre Grenon)