Wells Fargo net income almost halves in Q2
US banking giant Wells Fargo said on Friday that net income declined 48% to $3.11bn in the three months ended 30 June as the company put aside funds for bad loans and declines in its equity holdings weighed on its bottom line.
Wells Fargo & Co.
$72.80
11:08 14/11/24
Wells Fargo posted earnings per share of $0.74 each, including an $0.08 impact stemming from impairments, on revenues of $17.03bn, down from $20.27bn a year earlier and short of estimates of $17.53bn.
The San Francisco-based firm said current "market conditions" had forced it into a $576.0m second-quarter impairment on equity securities tied to its venture capital unit.
It also said it had made a $580.0m provision for credit losses in the quarter - a sharp reversal from a year earlier it benefited from the release of reserves.
Chief executive Charlie Scharf said: "While our net income declined in the second quarter, our underlying results reflected our improving earnings capacity with expenses declining and rising interest rates driving strong net interest income growth.
"Loan balances increased with growth in both consumer and commercial loans. Credit quality remained strong, and we continued to execute on our efficiency initiatives. Non-interest income declined as higher interest rates and weaker financial markets reduced our venture capital, mortgage banking, investment banking, and brokerage advisory results."
As of 1255 BST, Wells Fargo shares were down 1.26% in pre-market trading at $38.25 each.
Reporting by Iain Gilbert at Sharecast.com