Wells Fargo grows loans and deposits by 11 per cent
Wells Fargo’s average loans and deposits each grew 11 per cent in the third quarter. Net interest income rose, supporting higher annual revenue and profit, while the credit-loss provision increased. Revenue nevertheless fell from the preceding quarter. The bank’s figures are preliminary and remain subject to final review before the quarterly regulatory filing.
Economics & Markets··Night
Average lending and deposits expand together
Wells Fargo, the US banking group, released its third-quarter results on 13 October. Earnings per share and revenue both increased from a year earlier. Diluted earnings per share rose 13 per cent, from 1.66 dollars to 1.87 dollars. Revenue reached 21.870 billion dollars, up 2 per cent annually.[1], [2]
Average loans increased 11 per cent to 1.033 trillion dollars, while average deposits also rose 11 per cent, reaching 1.483 trillion dollars. Those balances are quarterly averages. Net income was 5.951 billion dollars, up 6 per cent from 5.589 billion dollars a year earlier. Despite the annual revenue increase, revenue was 3 per cent below the preceding quarter’s 22.622 billion dollars.[1]
Interest income grows as other income slips
Net interest income increased 5 per cent annually to 12.517 billion dollars. Wells Fargo cited growth in loans and investment securities, repricing of fixed-rate assets and other balance-sheet effects. Deposit costs and effects on floating-rate assets provided offsets. Noninterest income fell 1 per cent to 9.353 billion dollars. Wealth and Investment Management revenue grew 12 per cent, while Commercial Banking revenue rose 6 per cent.[1]
Noninterest expense declined 1 per cent to 13.743 billion dollars. The credit-loss provision increased from 681 million dollars to 1.029 billion dollars. Net charge-offs were 983 million dollars, and the change in the credit-loss allowance was 46 million dollars.[1]
Capital ratio declines and results remain preliminary
Return on equity was 13.8 per cent, and return on tangible common equity was 16.3 per cent. The common equity Tier one ratio fell from 11 per cent a year earlier to 10 per cent. Wells Fargo repurchased 28.6 million shares for 2.5 billion dollars during the quarter. The financial information is preliminary: final figures and additional disclosures in the quarterly Form 10-Q regulatory filing could change after final review or subsequent information.[1]
