Wells Fargo reported second quarter earnings that were below the Street expectations.
The bank’s earnings for the three months ending in June fell -46.45 from the year-ago quarter to 74 cents per share, compared to the Street consensus forecast of 80 cents per share.
Revenues plunged -16% to $17.028 billion.
Wells Fargo set aside $580 million to cover potential bad loans. In the same period last year, it released around $1.26 billion in loan reserves.
CEO Charlie Scharf said, "While our net income declined in the second quarter, our underlying results reflected our improving earnings capacity with expenses declining and rising interest rates driving strong net interest income growth."
Scharf also mentioned that the company’s results should continue to benefit from the rising interest rate environment, expecting net interest income growth to more than offset any further near-term pressure on noninterest income. "We do expect credit losses to increase from these incredibly low levels, but we have yet to see any meaningful deterioration in either our consumer or commercial portfolios," Scharf mentioned.