Wells Fargo second quarter results miss forecasts

Wells Fargo&Co. reported slightly weaker than expected second quarter results, as the low interest rate environment and losses on loans to the energy sector weighed on the lender's performance.

Second quarter net profits at the third largest bank in the US by assets dipped from $5.72bn in the year ago period to $5.56bn for the three months to the end of June.

Significantly, net charge-offs in the second quarter increased by $274m to reach $924m as a result of higher losses in the oil and gas portfolio, the company said in a statement.

At $1.01 earnings per share undershot analysts' estimates for $1.03.

Sales also came in slightly below forecasts, rising by 4% to $22.2bn in comparison to $22.17bn which analysts had penciled in.

The lender also topped up its reserves by $150m, primarily driven by loan growth, versus a reserve release of $350m in the second quarter of 2015.

Net interest margins slipped from 2.97% to 2.86%. Versus the first quarter of 2016 NIMs declined by four basis points driven by the impact of growth in long-term debt.

In parallel, return on equity came down from the 12.71% achieved in the second quarter of 2015 to 11.70%.

Its quarterly dividend was increased to 38 cents per share.

As of 13:13 BST stock in WellS Fargo&Co. was slipping 1.12% to $48.39.