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Revenue was lower than in the fourth quarter of 2019.
Justin Sullivan / Getty Images
Wells Fargo
shares are down after the San Francisco-based bank reported lower-than-expected and weaker revenues than in the same quarter last year.
Wells Fargo (ticker: WFC) made a profit of $ 3 billion, or 64 cents a share, with revenue of $ 17.9 billion. Analysts polled by FactSet expected the bank to post earnings of 59 cents per share, but with revenue of $ 18.1 billion. Profits were slightly higher in the fourth quarter of 2019, when they reached $ 2.9 billion, but revenue was less than the previous $ 19.9 billion.
Shares fell 4% in premarket trading.
Well Fargo’s provision for credit losses fell to $ 823 million, reflecting a $ 757 million reserve release after selling its student loan portfolio, as well as a reduction in net loan expenses uncollectible.
“Although our financial performance improved and we earned $ 3 billion in the fourth quarter, our results continued to be affected by the unprecedented operating environment and the work required to leave behind our substantial legacy problems,” he said. say Charlie Scharf, executive director of the bank. in a statement.
The efficiency ratio of the bank, which has been higher than that of its peers, increased sequentially, as it did year after year. As of the fourth quarter of 2020, the efficiency ratio stood at 83%, up from 81% and 79% in the third quarter of 2020 and the fourth quarter of 2019, respectively. Lower figures indicate that operating expenses account for a smaller share of revenue.
“With a broader and more consistent recovery and as we continue to move forward with our agenda, we hope you see that this franchise is able to do so much more,” Scharf said.
Prior to earnings, the bank reorganized its business units into consumer and lending banking, commercial banking, corporate and investment banking and wealth and investment management as it works to be more efficient.
There were high hopes for Wells Fargo ahead of the news of earnings. Wells Fargo was worse than his teammates in 2020 as he continues to recover from his fake account scandal. Analysts are increasingly finding that the bank has the most room for improvement.
The bank was scheduled to arrange a call with analysts Friday morning. Wall Street hopes to know how the bank plans to cut spending after announcing its intention to do so in previous quarters.
Citigroup
(C) i
JPMorgan Chase
(JPM) also reported gains on Friday.
bank of america
(BAC),
Goldman Sachs
(GS) i
Morgan Stanley (EM)
will report on fourth quarter results next week.
Write to Carleton English to [email protected]