Wells Fargo beats Q2 estimates for revenues and profit

Wells Fargo posted a big rise in quarterly earnings and revenue.

The banking heavyweight said that its topline grew by 20.4% over the three months ending on 30 June to reach $20.53bn.

Net income on the other hand shot up 57.1% to $4.94bn, for earnings per share of $1.25.

Analysts on Wall Street had estimated revenues of $20.1bn for EPS of $1.21.

The net interest margin on a taxable equivalent basis improved from 2.39% to 3.09%.

Those results came despite a $941m allowance increase in the lender's allowance for credit losses, mainly for commercial real estate office loans.

On the other hand, there were scant signs of systemic weakness across Wells Fargo's portfolio of loans in Commercial Banking, company boss Charlie Scharf said.

"While we haven’t seen significant losses in our office portfolio to-date, we are reserving for the weakness that we expect to play out in that market over time," Scharf added.

The chief executive officer also noted that management believed it prudent to hold "significant excess capital" until there was more "specificity" on the new bank capital requirements.

As of 1220 BST, shares in Wells Fargo were rising by 2.75% to $44.91 in pre-market trading.

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