Wells Fargo reported, the bank caused a pleasant surprise

By RockedBuzz 3 Min Read

In the quarter, Wells Fargo’s revenue was almost 17 percent higher than a year earlier, and the bank beat analysts’ expectations by 2 percent.

Wells Fargo Quarterly Results and Expectations
factexpectedfact/expectedbasechange (year/year)
Revenue ($ billion) 20.53 20.122.0% 17.6016.6%
EPS (USD) 1.25 1.168.2% 0.8252.4%
Source: Refinitiv, Portfolio

The profit per share of the major American bank in the first quarter of this year was $1.25, exceeding the value expected by Reuters analysts by more than 8 percent, and the EPS achieved in the same period a year ago by more than 52 percent.

wells fargo q223 613171

The most important details of the quick report:

  • the bank benefited from the high interest rate environment, Wells Fargo’s net interest income jumped by 29.1% to $13.16 billion, which exceeded analysts’ expectations of $12.82 billion.
  • The financial institution’s home lending business performed poorly, with revenue here falling by 13 percent year-on-year to 847 million euros.
  • the bank’s net write-off was 764 million dollars, almost double the 345 million euros a year earlier.
  • The provision for loan losses almost tripled from $580 million to $1.71 billion.
  • The periodical average loan portfolio for the quarter increased by 2.1% to $945.9 million, while the average deposit portfolio decreased by 6.8% to $1.35 billion.

CEO Charles Scharf commented on the quarterly numbers as follows:

“In the second quarter, we reported solid results, with net income of $4.9 billion and revenue of $20.5 billion. We had strong net interest income in the higher interest rate environment. As expected, net loan write-offs increased compared to the first quarter. There was a $949 million increase in provision for credit losses, primarily due to commercial real estate office loans and higher credit card loan portfolios. Although we have not experienced significant losses in our office portfolio so far, we are reserving for more difficult times. The Fed’s recent stress test confirmed Wells Fargo’s adequate, strong capital position.”

The share price of the financial institution rose by more than 3 percent in pre-opening trading:


Cover image: Shutterstock

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