Wells Fargo & Company..
On Thursday, it said it saw a 59% increase in third-quarter profits due to the release of funds it had reserved for a potential bad debt loss during the pandemic.
San Francisco-based lenders generated $ 5.12 billion in revenue. Profit per share was $ 1.17, which was higher than expected at $ 1.
Major banks are fighting a new normal beyond the first shock of last year’s pandemic economic collapse. Consumers and businesses continue to pay primarily loans, and Wells Fargo has urged the release of the $ 1.65 billion reserves it had reserved for these losses.
However, low interest rates and a fragile economy are reducing demand for banks’ bread and butter lending operations. JP Morgan Chase & Co. Said Wednesday that total lending was almost flat compared to three months ago, but increased by 6% compared to a year ago.
Wells Fargo’s revenue was down 2% to $ 18.83 billion. This was above the $ 18.27 billion expected by FactSet polled analysts.
Banks’ net interest income, a measure of loan income, fell 5% to $ 8.91 billion. Loans were down 6% from a year ago, but up 1% from the previous quarter.
Non-interest income, including fees, was flat at $ 9.93 billion.
Wells Fargo is trying to overcome the sales practice scandal five years ago, which probably created millions of fake accounts. In September, Wells Fargo paid a $ 250 million fine to one of the highest regulators, the Monetary Authority, for failing to resolve the mortgage business problem. Another regulator, the Federal Reserve, still caps how banks can grow.
Charles Fargo, who became CEO of Wells Fargo about two years ago, has long stated that it will take years to complete the work required by regulators.
“We believe we have made great strides and are confident that we can continue to close the remaining gaps in the coming years,” Schaff said in a statement.
At the same time, banks are trying to reduce costs by dismissing workers, closing branches and reducing office space. Non-interest expense in the third quarter decreased 13% to $ 13.3 billion.
Wells Fargo’s share has risen by more than 50% this year. In early trading, they fell about 2%.
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Wells Fargo profits rise 59% with reserve release
Source link Wells Fargo profits rise 59% with reserve release