Wells Fargo to take $1.4 billion provision in fourth quarter for losses on loans

Wells Fargo & Co. is absorbing $1.4 billion (euro940 million) in losses on home equity loans that borrowers have stopped repaying amid a deepening real estate slump that has turned into a financial sinkhole.

Until Wells Fargo disclosed its projected losses late Tuesday, the San Francisco-based bank had suffered relatively little damage in a mortgage meltdown that had already battered other major U.S. lenders.

"Clearly, this is a disappointment because (Wells) had been seen as better managers of credit than many other big banks," said RBC Capital Markets analyst Joseph Morford. "But now they have a big blemish on them, too."

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