NEW YORK – Wachovia Corp. (WB), the No. 5 U.S. bank, on Thursday said fourth-quarter profit rose 23 percent, as consumer loans and deposits grew and investment banking profit more than doubled.
Wachovia raised its quarterly dividend by 14 percent, its second increase in six months, and authorized the buyback of up to 60 million additional common shares.
The Charlotte, North Carolina-based company said fourth quarter net income rose to $1.1 billion, or 83 cents per share, from $891 million, or 66 cents per share, a year earlier.
Excluding merger and restructuring charges and the effects of accounting changes, Wachovia said it earned 88 cents per share, compared with 72 cents a year earlier. On that basis, profit matched the average forecast of analysts polled by Reuters Research, a unit of Reuters Group Plc.
Revenue on a taxable equivalent basis rose 23 percent to $5.53 billion.
In a statement, Chief Executive Ken Thompson said Wachovia believes it is "poised to continue to achieve our goal of generating consistent, annual double-digit earnings growth." Wachovia's net profit rose 20 percent in 2003.
Wachovia, which has $400.9 billion of assets, said quarterly profit rose in three of its four major business lines. Retail banking profit fell less than 1 percent to $564 million, corporate and investment banking profit more than doubled to $314 million, capital management profit rose 43 percent to $136 million, and wealth management profit rose 15 percent to $45 million.
Noninterest expense, such as salaries and equipment, rose 24 percent to $3.75 billion, largely because Wachovia in July merged its retail brokerage operations with those of Prudential Financial Inc. (PRU), creating the No. 3 U.S. full-service retail brokerage.
Wachovia said it set aside $62 million for bad loans, down 69 percent from a year earlier, and net charge-offs, or loans on which the bank does not expect to be paid back, fell 22 percent to $156 million. Nonperforming assets fell 34 percent to $1.15 billion.
Net interest margin, the difference between what Wachovia earns on loans and pays on deposits, rose to 3.64 percent from 3.57 percent in the third quarter, and rose from 3.90 percent a year earlier.
Wachovia said net interest, or lending, income rose 15 percent to $2.94 billion on a taxable equivalent basis, while fee and other income rose 33 percent to $2.59 billion.
Loans rose 2 percent to $165.6 billion, deposits rose 16 percent to $221 billion, and assets rose 17 percent.
Wachovia raised its quarterly dividend to 40 cents a share, up from 35 cents, and said the dividend will be payable on March 15 to shareholders of record as of Feb. 27.
Wachovia shares closed Wednesday on the New York Stock Exchange at $47.30. The stock has risen 23 percent in the last year, compared with a 14 percent rise in the Standard & Poor's banks index.