Bank Earnings Depict Industry Of Haves, Have Nots

SARA LEPRO

NEW YORK (AP) — The earnings reports from Wells Fargo & Co., Morgan Stanley and a handful of regional banks show there's a formula for prospering in a weak economy: a strong retail or investment banking operation and plenty of money on hand.

Loan losses are rising across the industry as consumers and businesses still struggle to pay their debts, but banks that can rely on a stream of income from their customers have been able to mitigate the damage. So have the companies that do investment banking.

Wells Fargo and US Bancorp, a regional based in Minneapolis, both said Wednesday the money they made by making loans and managing customer accounts offset higher losses on failed loans and drove their profits higher. Hudson City Bancorp Inc., a regional based in New Jersey, also said Wednesday its profit grew thanks to growth in its retail banking operations. And M&T Bank Corp., based in Buffalo, said late Tuesday it had a similar performance.

Morgan Stanley, whose business is investment rather than retail banking, joined big banks like JPMorgan Chase & Co. that said last week they were able to insulate themselves from higher loan losses with robust trading activity.