Wells Fargo Shares Jump 3% As The Bank Exceeds Expectations Despite Increases In Loan Loss Reserves.
Despite historically low loan delinquencies, Wells Fargo said Friday it decided to boost reserves as the economy slows, cutting into its third-quarter profit. Shares of Wells Fargo rose more than 3% after the bank’s results exceeded expectations. Here’s how the bank compared with Refinitiv’s earnings per share: $1.30 adjusted vs. $1.09 expected. Revenue: $19.51 billion vs. $18.78 billion expected.
Net income for the quarter that ended Sept. 30 dropped more than 30% to $3.53 billion, or 85 cents per share, from $5.12 billion, or $1.17 per share, during the same quarter last year. After adjustments, Wells exceeded analysts’ expectations with earnings per share of $1.30. It said that its performance was significantly impacted by operating losses of $2 billion, or 45 cents per share, caused by litigation, customer remediation, and regulatory matters. Wells operates under a series of consent orders tied to its 2016 fake accounts scandal, including one from the Fed that caps its asset growth. In the latest period, the bank set aside $784 million for credit losses after reducing its provisions by $1.4 billion a year ago. The bank said that the provision included a $385 million increase in the allowance for credit losses reflecting loan growth and a less favorable economic environment.