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.
WELLS FARGO
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Wells Fargo & Co.
$72.57
08:45 14/11/24
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.