Treading the beaten track of prominent banks, the San Francisco-based Wells Fargo has decided upon a monstrous 85 percent cut in its dividend, which is expected to bring the company a yearly saving of $5 billion. In addition, the company has figured out other ways to further prop up its capital base with additional yearly saving of about $2 billion.

The proposed move of slashing dividend implies that Wells Fargo's quarterly dividend will come down to a mere 5 cents from 34 cents.

The company's President and CEO, John Stumpf, said: "This was a very difficult decision but it's absolutely right for our company and our shareholders because it will further strengthen our ability to grow market share and to continue our long track record of profitable growth."

After having increased its expected loss figures for the fourth quarter last month, Wells Fargo - still in the process of absorbing the Wachovia Corp takeover - now anticipates a $2.73 billion fourth-quarter loss, as against the earlier estimated loss of $2.55 billion.

Nonetheless, the bank has divulged better mortgage lending figures for January and February this year, and is optimistic about repaying the $25 billion government bailout funds at the earliest. Mortgage originations in these two months went up to $59 billion - thereby surpassing the fourth quarter figures of $50 billion originated in new mortgage loans.