Fri Dec 21, 2012 2:32pm EST

n">(Reuters) - Wells Fargo & Co customers on Friday had trouble accessing the bank's Web site for a fourth day, as a federal regulator reiterated the need for banks to have systems in place to ward off cyber attacks.

A spokeswoman for the No. 4 U.S. bank by assets said some customers may have intermittent access to their online banking, although the high volume of traffic that has flooded the site has declined.

"Our technical teams have been working around the clock to ensure our Web site is accessible to our customers," bank spokeswoman Bridget Braxton said. The bank has been posting apologies on its Twitter account.

Since September, a hacker activist group called the Izz ad-Din al-Qassam Cyber Fighters has said it was targeting major banks with so-called denial of service cyber attacks. These attacks can disrupt service by deluging Web sites with high traffic.

On Tuesday, the group said in an Internet posting that it would target the "5 major US banks." In a similar posting last week, it forecast attacks against banks that included PNC Financial Services Group Inc and U.S. Bancorp, which reported some disruptions.

A PNC spokesman on Friday said the bank's systems were operating normally. Spokespersons for Bank of America Corp, JPMorgan Chase & Co and U.S. Bancorp declined to comment. Citigroup Inc could not be immediately reached.

In its alert on Friday, the U.S. Office of the Comptroller of the Currency, which regulates national banks and thrifts, said groups launching denial of service attacks had varying motives, from gaining public attention to diverting the attention of banks while launching simultaneous attacks to commit fraud or steal proprietary information.

"Banks need to have a heightened sense of awareness regarding these attacks and employ appropriate resources to identify and mitigate the associated risks," the alert said.

Banks should have sufficient staffing during attacks, work with third-party providers and share information with other banks, the OCC said.

Of five major banks, Wells Fargo on Friday had spurred the most complaints from users about access problems, according to the Web site SiteDown.co, which tracks customer reports. It listed 576 "downtime reports" in the past 24 hours.

Wells Fargo says it has 21 million active online banking customers.

(Reporting By Rick Rothacker in Charlotte, N.C.; Editing by Gerald E. McCormick)

View the original article here

Fri Oct 12, 2012 5:41pm EDT

n">(Reuters) - Two of the nation's biggest banks, Wells Fargo & Co and J.P. Morgan Chase & Co, made record profits over the last three months from a sharp rise in mortgage lending, though performance stumbles elsewhere left investors worried about how long those profits can last.

Both banks reported double-digit increases in third-quarter earnings on Friday, as record-low interest rates and an uptick in the housing market drove a boom in mortgages.

But analysts said those record earnings might not be sustainable, as each bank posted declining margins that suggest they may have a harder time earning as much in the future.

J.P. Morgan shares closed the day down 1.1 percent at $41.62, while Wells Fargo declined 2.6 percent to $34.25. Both underperformed the broader market, which was essentially flat.

The issue is the "net interest margin," or the spread between what the banks earn from loans and what they pay out on deposits. That margin contracted in both cases.

"You have a battle between net interest margin and mortgage banking," said Marty Mosby, an analyst at Guggenheim Securities, referring to the tension between profit-drivers now and potential future results.

MORTGAGES ON THE MOVE

The mortgage market dragged on banks during the worst of the financial crisis but has become a bright spot of late. After the Federal Reserve said in September it would buy huge quantities of mortgage bonds every month for the foreseeable future, rates fell sharply and loan applications soared.

Wells Fargo, by far the largest mortgage lender in the country - three times the size of its closest peer - made $139 billion in mortgages in the three months ending in September, up $50 billion from a year earlier.

There is a limit to that growth, though, warned J.P. Morgan Chief Executive Jamie Dimon.

"We don't expect to count on high margins and mortgage origination forever," Dimon said on Friday. The refinancing trend, he added, will continue "next quarter, maybe for a couple of quarters after that, but it won't last much longer."

SMALLER WHALES

Besides the good news about the housing market, J.P. Morgan also reported that losses are shrinking rapidly from the bad trades engineered by the so-called London Whale, which cost the bank almost $6 billion in the first half of the year.

The losses cast a harsh light on Dimon, the chief executive viewed by some as a potential leading candidate for U.S. Treasury secretary in a second Obama administration. He has apologized repeatedly, and at length, for failing to catch the problem before it grew so big.

The nation's largest bank by assets posted net income of $5.71 billion, or $1.40 a share, up 34 percent from a profit of $4.26 billion, or $1.02 a share, a year earlier.

Analysts on average had expected a profit of $1.24 a share, according to surveys by Thomson Reuters I/B/E/S. Barclays Capital said it was the 17th time in the last 18 quarters that the bank beat Wall Street's forecasts.

Net interest margin contracted to 2.43 percent in the quarter, 4 basis points less than the prior quarter and 23 basis points lower than a year earlier.

Wells Fargo, the nation's fourth-largest bank by deposits, earned $4.9 billion in the quarter, 22 percent more than a year earlier. Per-share earnings of 88 cents just beat the average Wall Street forecast of 87 cents, although revenue missed estimates by some $270 million.

Wells, Warren Buffett's favorite bank, stumbled on the net interest margin. It fell 25 basis points to 3.66 percent in the third quarter. That was a sharper drop than expected, though bank executives insisted they were unconcerned and that investors should focus on overall profitability.

Keefe, Bruyette & Woods analyst Frederick Cannon, in a research report for clients, said the strength in mortgages was good but the weakness in the interest margin was more important.

(Reporting by David Henry in New York and Rick Rothacker in Charlotte, N.C.; additional reporting by Dan Wilchins and Jed Horowitz in New York; writing by Ben Berkowitz; editing by Matthew Lewis)

View the original article here