Wednesday's Headlines: Wells Fargo to cut costs 12% by 2012

Wells Fargo plans to cut costs by 12 percent before the end of 2012, MarketWatch and other media report.

The San Francisco-based bank announced earlier this year it would begin to cut costs and has already shut down parts of its mortgage lending business and wealth management business. Many of the savings will come as the firm completes the integration of Wachovia, Marketwatch reports. In the second quarter, expenses dropped 2% from the same period a year go to $12.5 billion. The firm aims to bring quarterly costs down to $11 billion per quarter.

Looking ahead, Wells Fargo chief financial officer Timothy Sloan said cost cuts will come mostly from removing "unnecessary complexity... and duplication." Lay-offs will not be a large contributor, "because that might slow Wells Fargo down rather than speed profit growth," Marketwatch reports, citing comments from the bank.

Other News:

Aurelius Capital managing director denies insider trading on Washington Mutual bankruptcy. [Associated Press]

HSBC lets go of US clients with offshore accounts to mollify regulators. [Wall Street Journal]

Bank of America CEO struggles to boost earnings, despite mortgage progress. [Breakingviews]

Citadel blames E*Trade for squandering franchise and urges sale. [DealBook]

Hedge funds boost cash holdings as Europe crisis, US debt woes, and China inflation create uncertainty. [Bloomberg]

Knight Capital Q2 profit drops sharply on slower trading activity, falling volatility. [MarketWatch]

Australian BT Investment Management to buy London firm JO Hambro Capital. [Financial Times]

Financial Stability Board supports recommendations aimed at avoiding another financial crisis. [New York Times]

Troubled German bank WestLB wants to sell hotel, resort loan portfolio. [Wall Street Journal]

SEC freezes assets of Swiss firms accused of insider trading. [DealBook]