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Banks' profits jump
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October 16, 2001: 2:06 p.m. ET
Bank One, Wells Fargo report improved third-quarter earnings; Mellon slips.
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NEW YORK (CNNmoney) - Two of the biggest U.S. banks reported third-quarter earnings Tuesday that rose past Wall Street estimates, despite a sluggish economy and the aftershocks of the Sept. 11 terror attacks.
Bank One Corp., the fifth-largest U.S. bank, said it earned $754 million, or 64 cents a share, compared with $581 million, or 50 cents a share, a year ago. Wall Street analysts surveyed by earnings tracker First Call expected Bank One to earn 62 cents a share.
Bank One (ONE: up $2.46 to $32.81, Research, Estimates) shares jumped about six percent on the news in midday trading, regaining much of what they had lost after the terror attacks.
The company also confirmed reports that it had cut 2,690 additional jobs on or before Sept. 30, bringing to 8,000 the number of cuts made since CEO James "Jamie" Dimon joined the bank last year.
Dimon accepted the challenge of helping Chicago-based Bank One to recover from the near-collapse of its First USA credit card unit in 1999, and this quarter's results were the company's best since that time. In the third quarter, its revenue rose to $4 billion from $3.9 billion a year ago.
"Our efforts to reduce costs, manage credit exposure and invest in key businesses are paying off," Dimon said.
But Dimon also warned that the Sept. 11 attacks, which killed thousands and disrupted the U.S. economy, are likely to weaken credit quality over the coming quarters.
In a conference call with analysts, Dimon said he expected fourth-quarter earnings to match the third quarter's, "maybe a penny better." Analysts surveyed by First Call expect Bank One to earn 65 cents a share in the fourth quarter.
Separately, No. 4 U.S. bank Wells Fargo & Co. reported quarterly earnings of $1.16 billion, or 67 cents a share, compared with $821 million, or 47 cents a share, a year ago. Wall Street expected the bank to earn 69 cents a share.
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Wells Fargo said the Federal Reserve's aggressive interest-rate cuts this year to keep the economy out of a recession boosted the bank's vital mortgage business.
The San Francisco-based bank said its revenue rose to $5.5 billion from $4.8 billion a year ago.
Wells Fargo (WFC: down $0.58 to $40.19, Research, Estimates) shares rose in midday trading.
Mellon Financial Corp., which owns the Dreyfus family of mutual funds, reported third-quarter earnings of $178 million, or 38 cents a share, compared with $195 million, or 40 cents a share, a year ago. Wall Street analysts expected Mellon to earn 42 cents a share, according to First Call.
Pittsburgh-based Mellon, which sold its retail banking operations in July, said its results were hurt by the economic slowdown and the attacks. Mellon has been focusing on investment businesses such as asset management in the past few years, moving away from less lucrative traditional banking services like lending. But weak stock market conditions have burned investors and caused many to shun stocks and mutual funds.
Mellon (MEL: up $0.04 to $31.88, Research, Estimates) shares fell in afternoon trading. 
- from staff and wire reports
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