US banking giant Wells Fargo has said that it is cutting 2,300 jobs due to declines in mortgage refinancings in the wake of higher interest rates.
Wells Fargo, the nation’s largest bank by market capitalisation and the country’s largest mortgage originator, gave a 60-day notice to the affected employees on Wednesday, who work on mortgage finance as part of a consumer lending group of more than 70,000 workers.
While interest rates “remain very favourable by historical standards for homebuyers, a recent rise in rates has affected consumer demand for mortgage refinancing, causing volumes to fall below what we experienced throughout 2012 and early 2013,” said a Wells Fargo statement.
Wells Fargo’s most recent earnings report in July said that income from mortgage banking fell 3 per cent, even as mortgage applications and mortgage originations rose.
Wells Fargo officials acknowledged at the time that higher interest rates were a challenge in some respects, but characterised the overall housing market as “strong” given rising home sales and higher prices.
Wells Fargo had said on Wednesday that it was working with the affected employees to find other jobs within the company.