Wells Fargo profit advances 14 percent in the first quarter

Nathan Andrada – Fourth Estate Cooperative Contributor

New York, NY, United States (4E) – Wells Fargo reported on Friday a 14 percent increase in earnings during the first quarter, topping analysts’ estimates as lower provisions for bad loans offset weak performance at the bank’s mortgage unit. Profit climbed to $5.89bn, or $1.05 per share, from $5.17bn, or 92 cents per share, from a year ago. Revenue dropped 3 percent to $20.63bn. Analysts predicted earnings of 97 cents per share and revenue of $20.6bn. In the latest quarter, Wells Fargo recorded $36bn in home lending originations, from $109bn in the previous year and $50bn in the fourth quarter of 2013, according to the country’s biggest mortgage lender. The financial sector has recently been hit by falling mortgage originations and refinancing activity. Wells Fargo said in February that it would cut the minimum credit score required for mortgages that are eligible for support from the government. Wells Fargo recorded $500mn in reserve release in the first quarter, higher from $200mn as credit quality improves. More reserves are released by banks when they predict less funds are needed to cover loan losses. Credit-loss provisions hit $325mn, significantly below the $1.22bn in the year-earlier period. Total loans increased $4.2bn sequentially to $826.4bn, reflecting a slower growth compared with the increase of $13.5bn in the fourth quarter. Net interest margin fell to 3.2 percent from 3.49 percent from the previous year and 3.27 percent in the previous quarter.

Article © AHN – All Rights Reserved
About the Author

Leave a Reply