Wells Fargo first quarter revenues fall short of Wall Street forecasts

Wells Fargo's top line growth fell short of Wall Street analysts' expectations in the first quarter, with the bank blaming it on the impact of fewer trading days.

America's third largest lender said revenues for the three months to the end of March stood at $22.0bn (consensus: $22.3bn), which was a shade lower than the equivalent year-ago figure of $22.2bn.

Earnings per share came in at $1.0, edging past estimates calling for a quarterly EPS of 97 cents and a penny ahead of $0.99 made in the same period last year.

Net interest income was up 5% on the year at $12.3bn, but down by $102m on the previous three months, primarily because of the impact of two fewer trading days in the quarter, although reduced balances in trading assets and of mortgages held-for-sale also had an impact.

Non-interest income grew from $9.2bn in the fourth quarter of 2016 to $9.7bn over the latest three-month stretch, primarily thanks to an improved contribution from trading activities of $439m, versus the -$109.0 drag in the prior period.

Other income and higher market sensitive revenues also helped, rising from -$382.0m in the previous quarter to $145.0m, but were partially offset by lower income from mortgage banking, investment banking fees and real estate brokerage commissions.

Average total loans also fell in comparison to the fourth quarter, decreasing by $502.0m to $963.6bn. In parallel, period-end loan balances shrank by $9.2bn to $958.4bn amid lower activity in credit card unit and fewer auto loans.

The lender's return on equity slipped from 11.75% during the same quarter of 2016 to 11.54%, as net interest margins sliped from 2.90% to 2.87%.

To take note of, overnight Berkshire Hathaway announced it was to sell 9.0m shares in Wells Fargo, with a market value of roughly $480m in order to lower its stake back below the 10% threshhold which would see it come under increased oversight from the Federal Reserve.

As of 1430 GMT shares in Wells Fargo were down by 2.0% at $51.98.