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Wells Fargo is still dealing with the consequences of its fake account scandal.
Justin Sullivan / Getty Images
Wells Fargo
equities rose as the bank’s first-quarter results exceeded analysts ’expectations.
The bank made a profit of $ 1.05 per share on revenue of $ 18.1 billion, surpassing estimates of 71 cents per share on revenue of $ 17.5 billion.
The result was much stronger than in the previous year’s quarter, when Wells Fargo (WFC) earned $ 17.7 billion in revenue as it prepared for the economic impact of the coronavirus pandemic. . Net income amounted to $ 4.7 billion, up from $ 653 million the previous year, in part because the bank released from its reserves $ 1.6 billion it had set aside for loan losses.
Wells Fargo shares rose nearly 5% in the morning trading.
“Our quarterly results, which included a $ 1.6 billion pre-tax reduction in the credit loss allocation, reflected an improvement in the U.S. economy, a continued focus on our strategic priorities. and continued support for our customers and our communities, ”Charlie Scharf, the bank’s chief executive, said in a statement.
Wells Fargo has been one of the most watched banks for the past year, as it continues to address the aftermath of its counterfeiting scandal, which emerged in 2016. Wells Fargo has smaller commercial and investment banking businesses than its comrades, benefited less from an increase in bargaining and bargaining that occurred during the pandemic. Its actions have lagged behind the industry for much of last year.
In recent quarters, Scharf has highlighted the work that Wells Fargo has ahead of it. The list is streamlining operations and working to get the Federal Reserve to remove a $ 2 trillion limit on its assets that the central bank imposed in response to the counterfeiting scandal.
In the first quarter, the bank’s average tangible common equity return was 12.7%, compared to the previous year’s quarter. Its efficiency ratio, a measure derived from dividing a bank’s interest-free expenses by its net profit, increased 3 percentage points from the first quarter of last year to 77%, but improved by 7 percentage points compared to the fourth quarter of last year.
“We are also moving forward with our commitment to simplifying the company and focusing our resources on our core customers. We announced sales of our Asset Management and Corporate Trust businesses during the quarter and increased resources dedicated to initiatives to help drive the growth of our core franchises, ”said Scharf.
Wells Fargo shares have risen 38.3% this year topping the KBW Bank (BKX) index, up 27%, and the
S&P 500,
10% more.
JPMorgan Chase
(JPM) i
Goldman Sachs
Group (GS) reported its benefits in the morning. Both were much stronger than expected, thanks to increased trading and trading activity.
bank of america
(BAC) i
Citigroup
(C) report Thursday, while
Morgan Stanley
The results will be published on Friday.
Write to Carleton English at [email protected]