The rise in U.S. mortgage rates in the latter part of 2013 has dampened the home-loan business of big banks JPMorgan , Citigroup and Wells Fargo . The increase in bond yields since the summer has caused mortgage rates to rise, which in turn has discouraged consumers from refinancing their home loans. Wells Fargo , the biggest U.S. mortgage lender, says its gains in retail banking and decreased losses on bad loans — down 54 percent to $963 million in the fourth quarter — are helping offset the impact of the mortgage business decline. The bank has cut about 5,700 jobs, most of them mortgage-related, since the end of September, so its expenses in that business are reduced. Wells Fargo's fourth-quarter earnings of $1 per share beat Wall Street analysts' forecast of 99 cents . Net income after dividend payments on preferred stock jumped 11 percent to $5.4 billion from $4.9 billion a year earlier. Analysts on a conference call with top Wells Fargo executives wanted to know whether growth in loan demand has hit a wall. CEO John Stumpf addressed the question. QUESTION: What do you see happening with the economy and lending? ANSWER: ( John Stumpf , Wells CEO): "I'm guardedly optimistic about the economy, and I'm optimistic about our company's ability ... to grow loans. "I'm starting to hear more things about more prospects (of borrowing) from customers."
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