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A man walks past a Wells Fargo Bank branch on a rainy Washington morning.
Gary Cameron | Reuters
Wells Fargo reported mixed fourth-quarter results on Friday, lowering the bank’s stock.
Here’s how the numbers compare to Wall Street expectations:
- Earnings: 64 cents per share vs. Refinitiv estimate of 60 cents per share
- Revenue: $ 17.93 billion against $ 18.127 billion forecast
- Net Interest Income: $ 9.275 billion vs. $ 9.34 billion FactSet estimate
Wells Fargo shares fell 4.7% before the opening bell.
The bank’s earnings include a restructuring charge of $ 781 million, a reserve release of $ 757 million due to the sale of its student loan portfolio and an impact of $ 321 million due to “the impact of customer adjustments ”.
“Although our financial performance improved and we earned $ 3.0 billion in the fourth quarter, our results continued to be affected by the unprecedented operating environment and the work required to put aside our significant issues. inherited from our heritage, “CEO Charlie Scharf said in a statement. “With a more cohesive overall recovery and as we continue to move forward with our program, we hope you will see that this franchise is capable of much more.”
The bank’s consumer banking and lending division saw revenue decline 5% year over year, from $ 9.08 billion to $ 8.61 billion. Revenues from its commercial banking activities were $ 2.388 billion, down 18% from $ 2.9 billion the year before.
Revenues from business and investment banking services fell 7% year-over-year, from $ 3.329 billion to $ 3.11 billion. This includes a 25% drop in stock market trading income. Fixed income trading income was roughly stable compared to the previous year.
“We have prioritized and are making progress in our development of risks and controls,” said Scharf. “We have clarified our strategic priorities and are exiting some non-strategic activities; and we have identified and are implementing a series of actions to improve our financial performance.”
Wells Fargo shares rose more than 28% in the fourth quarter as the rollout of Covid vaccines and the prospect of additional fiscal stimulus raised hopes of a strong economic recovery.
Despite the strong gain, Wells shares still lagged behind those of JPMorgan Chase, which rose nearly 32% in the same time frame. JPMorgan’s quarterly figures, released earlier on Friday, beat estimates on the upper and lower lines. Citigroup’s revenues are mixed.
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