Wells Fargo (WFC) 2Q 2022 earnings

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Charles Scharf

Qilai Shen | Bloomberg | Getty Images

Wells Fargo mentioned Friday that second-quarter revenue declined 48% from a yr earlier because the agency put aside funds for unhealthy loans.

Here are the numbers:

  • Earnings per share: 74 cents, together with an 8 cent per share influence tied to impairments.
  • Revenue: $17.03 billion vs $17.53 billion estimate

Profit of $3.12 billion, or 74 cents per share, fell sharply in comparison with $6.04 billion, or $1.38, a yr earlier, the financial institution mentioned in an announcement. For the second quarter, analysts surveyed by Refinitiv had estimated Wells Fargo would earn 80 cents. It’s not instantly clear if the numbers are comparable.

The financial institution had a $580 million provision for credit score losses within the quarter.

Last month, Wells Fargo executives disclosed that second-quarter mortgage income was headed for a 50% decline from the primary quarter as sharply greater rates of interest curtailed buy and refinance exercise.

It’s one of many impacts of the Federal Reserve’s marketing campaign to battle inflation by elevating charges by 125 foundation factors within the second quarter alone. Wells Fargo, with its give attention to retail and business banking, was extensively anticipated to be one of many massive beneficiaries of upper charges.

But considerations that the Fed would inadvertently tip the economic system into recession have grown this yr, weighing closely on the shares of banks. That’s as a result of extra debtors would default on loans, from bank cards to mortgages to business strains of credit score, in a recession.

Led by CEO Charlie Scharf since October 2019, the financial institution continues to be working below a sequence of consent orders tied to its 2016 faux accounts scandal, together with one from the Fed that caps its asset development. Analysts will probably be eager to listen to from Scharf about any progress being made to resolve these orders.

Shares of Wells Fargo dropped 19% this yr, roughly in step with the decline of the KBW Bank Index.

On Thursday, greater rival JPMorgan Chase posted outcomes that missed expectations because it constructed reserves for unhealthy loans, and Morgan Stanley disenchanted on a worse-than-expected slowdown in funding banking charges.

Bank of America and Goldman Sachs are scheduled to report outcomes on Monday.

This story is creating. Please examine again for updates.

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