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Wells Fargo continues to deal with the consequences of the false accounts scandal.
Justin Sullivan / Getty Images
Fargo fountains
shares rallied as the bank’s first-quarter results exceeded analysts’ expectations.
The bank posted earnings of $ 1.05 per share on revenue of $ 18.1 billion, an eclipsing estimate of 71 cents per share from $ 17.5 billion in revenue.
The result was much stronger than for the quarter a year ago, when Wells Fargo (WFC) earned a penny a share of $ 17.7 billion in revenue as it prepared for the economic impact of the coronavirus pandemic. Net income totaled $ 4.7 billion, up from $ 653 million a year ago, in part because the bank released $ 1.6 billion from its reserves that it set aside for loan losses. .
Wells Fargo shares rose nearly 5% in morning trades.
“Our quarterly results, which included a $ 1.6 billion pretax reduction in the credit loss allowance, reflected an improved US economy, continued focus on our strategic priorities and continued support for our customers and our communities.” , said Charlie Scharf, executive director of the bank, said in a statement.
Wells Fargo has been one of the most noticed banks in the last year, as it continues to address the consequences of the fake accounts scandal that erupted in 2016. Wells Fargo has smaller commercial and investment banking businesses than its counterparts, so it has benefited less. of an increase in transactions and transactions that came during the pandemic. Its actions lagged behind the industry for much of last year.
In recent quarters, Scharf has highlighted the work that Wells Fargo is facing. The list simplifies operations and works to get the Federal Reserve to remove a $ 2 trillion limit on its assets that the central bank imposed in response to the fake accounts scandal.
In the first quarter, the bank’s return on average tangible average capital was 12.7%, up from the fixed level in the previous quarter. Its efficiency ratio, a measure derived by dividing a bank’s uninteresting net income, rose by 3 percentage points in the first quarter of last year to 77%, but improved by 7 percentage points from the fourth quarter of last year.
“We are also moving forward with our commitment to simplify the company and focus our resources on our core customers. We announced sales of our Asset Management and Corporate Trust businesses in the quarter and are increasing resources dedicated to initiatives to help grow our core franchises, ”said Scharf.
Wells Fargo shares rose 38.3% this year, beating the KBW Bank (BKX) index, which rose 27%, and
S&P 500,
increasing by 10%.
JPMorgan Chase
(JPM) and
Goldman Sachs
Group (GS) reported earnings earlier this morning. Both were much stronger than expected, due to the growth of trading and trading activity.
Bank of America
(BAC) and
City Group
(C) reports on Thursday, while
Morgan Stanley
The results are to come.
Write Carleton English to [email protected]