Wells Fargo profits rise 59% with reserve release

Wells Fargo & Company..

WFC 0.15%

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.

Big banks have moved beyond the first shock of last year’s pandemic economic collapse. Fight the new normal.. Consumers and businesses continue to pay primarily loans, and Wells Fargo has urged the release of $ 1.65 billion in reserves to cover potential loan losses.

Net bad debt amortization decreased by almost two-thirds year-on-year.

However, low interest rates and a fragile economy are reducing demand for banks’ bread and butter lending operations.

JP Morgan Chase

& Co.On wednesday Total loan amount is almost flat Compared to 3 months ago, it has increased by 6% compared to 1 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. Loan balances were down 6% from a year ago, but up 1% from the previous quarter.

Mortgage composition in the third quarter was $ 51.9 billion, down about 16% year-on-year. Car loan composition increased by about 70% to $ 9.2 billion.

Non-interest income, including fees, was flat at $ 9.93 billion. Wells Fargo’s smaller companies and investment banks, which are smaller than their rivals, saw a 25% increase in investment banking fees but a 15% decrease in transaction revenue.

Wells Fargo is trying to overcome the sales practice scandal five years ago, which probably created millions of fake accounts. September, Wells Fargo Paid a $ 250 million fine Unable to solve the mortgage business problem, so he went to the Office of the Comptroller of the Currency (one of its top regulators).

Another regulator, the Federal Reserve, still caps how banks can grow. Charles Schaff, who took over as CEO 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.

Mr. Schaff also said he wanted Find $ 8 Billion Annual Cost Savings.. To get there, he has fired workers, closed branches, and reduced office space. Non-interest expense in the third quarter decreased 13% to $ 13.3 billion.

Bank staff fell by more than 5,000 in the third quarter, down more than 21,000 from a year ago.

Wells Fargo’s share has risen by about 50% this year. They fell about 2% on Thursday morning trading.

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Wells Fargo profits rise 59% with reserve release

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