Wells Fargo & Co., one of the largest US banks, recorded weaker-than-expected net profit and revenue figures in the second quarter of 2022.
The bank’s net profit in April-June decreased to $3.12 billion, or $0.74 per share, compared to $6.04 billion, or $1.38 per share, in the same period last year. The consensus forecast of experts polled by FactSet for this indicator was $0.8 per share.
Wells Fargo’s quarterly revenue fell 16% to $17.02 billion from $20.27 billion. Analysts had forecast revenue of $17.48 billion on average.
The bank’s net interest income in April-June increased to $10.2 billion (the market forecast is $10.16 billion) from $8.8 billion a year earlier, non-interest income decreased to $6.83 billion from $11.47 billion.
„Our results will continue to be positively impacted by higher interest rates,” said Wells Fargo CEO Charlie Scharf. „Growth in net interest income could more than offset any pressure on non-interest income in the short term.”
Tier 1 capital adequacy ratio (CET1) of the bank as of June 30 decreased to 10.3% from 12.1% a year earlier. The average return on equity (ROE) fell to 7.1% from 13.6%.
Wells Fargo’s consumer and small business division’s quarterly revenue decreased 2% year-over-year to $8.507 billion. – by 5%.
The division which is engaged in servicing of corporate clients increased revenue by 18%, to $2.49 billion.
Wells Fargo’s fixed income revenue rose 5% to $934 million and equity revenue rose 23% to $253 million.
Since the beginning of 2022, the bank’s shares have fallen in price by 19%.