Abhoy Sarkar's Avatar
published in Blogs
Jan 13, 2023
Wells Fargo (WFC, $42.76) profits fall by half

Wells Fargo (WFC, $42.76) profits fall by half

Wells Fargo earnings fell by almost half to $2.59 billion, or 67 cents a share in the fourth quarter, from $5.47 billion, or $1.38 or 67 cents a share in the year-ago quarter. The figure beat analyst estimate of 60 cents share though. The profit plunge was in part by lower mortgage banking on fewer originations, as indicated by the bank.

Revenue fell -5.7% year-over-year to $19.66 billion, missing analysts’ expectations of $19.98 billion (according to Refinitiv).

The bank set aside $957 million for credit losses during the period, after reducing its provisions by $452 million a year ago. It had also previously revealed an impact of 70 cents a share from litigation and regulatory matters including a recent settlement with the Consumer Financial Protection Bureau.

Wells Fargo is expecting 2023 net interest income of about $49.5 billion (i.e. 10% growth), which is below the latest analyst estimate of $51.69 billion.

The bank’s home lending revenue fell -57% this quarter, on falling sales and refinancing activity amidst mortgage rates that have exceeded 6%.

 

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