Wells Fargo shares fell Friday even after fourth-quarter profit rose from a year ago, as the bank benefited from higher interest rates and cost-cutting efforts.
Here’s what the bank reported versus what Wall Street was expecting based on a survey of analysts by LSEG, formerly known as Refinitiv:
· Revenue: $20.48 billion vs. $20.30 billion expected
Wells Fargo’s stock fell 1% before the bell.
Total revenue came in at $20.48 billion for the period. That’s a 2% increase from the fourth quarter of 2022 when Wells Fargo posted $20.3 billion in revenue.
The bank posted net income of $3.45 billion, or 86 cents per share, up slightly from $3.16 billion, or 75 cents a share a year ago.
Earnings were lowered by a $1.9 billion, or 40 cent per-share charge, from an FDIC special assessment and a $969 million, or 20 cent, charge from severance expenses. Wells Fargo also recorded a $621 million, or 17 cents per share, tax benefit.
Chief Executive Officer Charlie Scharf commented, “Although our improved 2023 results benefited from the strong economic environment and higher interest rates, our continued focus on efficiency and strong credit discipline were important contributors as well.”
Provisions for credit losses rose 34% to $1.28 billion from $957 million a year ago, as allowances for credit losses rose for credit card and commercial real estate loans. Wells Fargo said that was partially offset by lower allowances for auto loans.
Wells Fargo shares are virtually flat this year after rallying more than 19% in 2023. During the period, interest rates surged, with the 10-year Treasury yield topping the 5% threshold in October, before finishing the year below 3.9%.
This story is developing. Please check back for updates.
