Date: 2025-03-10 Page is: DBtxt003.php txt00021124
Banking and Finance
Wells Fargo
MARKETS ... Wells Fargo profit jumps nearly 60% in the quarter, revenue tops expectations
Wells Fargo signage on May 5th, 2021 in New York City. Bill Tompkins | Michael Ochs Archives | Getty Images
Original article: https://www.cnbc.com/2021/10/14/wells-fargo-wfc-earnings-q3-2021.html
Burgess COMMENTARY
Peter Burgess
Yun Li @YUNLI626
PUBLISHED THU, OCT 14 20217:49 AM EDTUPDATED THU, OCT 14 20214:07 PM EDT
KEY POINTS
- Wells Fargo’s jump in profit was boosted by a release of its credit loss reserves as the recovery from the coronavirus pandemic accelerated in 2021.
- The bank posted earnings per share of $1.22, adjusted, topping the consensus estimate of 99 cents per share, according to Refinitiv.
Shares of the bank dipped 1.6% on Thursday following the earnings announcement. Here’s how the third quarter compared with Wall Street estimates:
- Net income: $5.1 billion, a 59% increase from $3.2 billion during the same quarter a year ago.
- Earnings per share: $1.22 a share, adjusted, topping the consensus estimate of 99 cents per share, according to Refinitiv.
- Revenue: $18.83 billion, compared with consensus estimate of $18.35 billion.
The bank paid a $250 million fine for its “unsafe or unsound practices” tied to its loan modification program, according to the Office of the Comptroller of the Currency.
“We are a different company today and the operational and cultural changes we’ve made are enabling us to execute with significantly greater discipline than we have in the past,” CEO Charlie Scharf said Thursday in a statement. “I believe we are making significant progress, and I remain confident in our ability to continue to close the remaining gaps over the next several years, though we may continue to have setbacks along the way.”
Wells Fargo saw its net interest income decrease by 5%, primarily due to soft demand and elevated prepayments and the impact of lower yields on earning assets.
Wells Fargo repurchased 114.2 million shares, or $5.3 billion, of common stock in the third quarter of 2021. The bank also increased the common stock dividend to 20 cents per share, up from 10 cents per share in the prior quarter.
The bank paid $72.6 million to settle a government lawsuit accusing the bank of defrauding hundreds of commercial customers, a filing last month revealed. Wells admitted to overcharging 771 businesses on foreign exchange transactions from 2010 through 2017.
Shares of Wells Fargo are up more than 50% this year on the back of the economic recovery after losing over 40% in 2020.