A man walks past a Wells Fargo Bank branch one rainy Washington morning.
Gary Cameron | Reuters
Wells Fargo posted mixed fourth-quarter results on Friday, causing the bank’s stock to fall.
This is how the numbers compare to Wall Street expectations:
- Earnings: 64 cents per share vs. Refinitiv estimate of 60 cents per share
- Revenue: $ 17.93 billion vs. $ 18.127 billion forecast
- Net Interest Income: $ 9.275 Billion vs. $ 9.34 Billion FactSet Estimate
Shares of Wells Fargo fell 4.7% before the opening bubble.
The bank’s revenues included a restructuring charge of $ 781 million, a release of $ 757 million as a result of the sale of its student loan portfolio and a hit of $ 321 million as a result of the “impact of customer recovery”.
“While our financial performance improved and we earned $ 3.0 billion in the fourth quarter, our results continued to be impacted by the unprecedented operating environment and the work required to move beyond our substantial legacy troubles,” CEO Charlie Scharf said in a statement . “With a more consistent broad recovery and as we continue our agenda, we expect you will see this franchise capable of much more.”
The bank’s consumer banking and lending division saw sales decline 5% year-over-year to $ 8.61 billion from $ 9.08 billion. Commercial banking revenues were $ 2.388 billion, down 18% from $ 2.9 billion in the same period a year earlier.
Corporate and investment banking revenues declined 7% year over year from $ 3.329 billion to $ 3.11 billion. That includes a 25% decline in trading earnings in the stock markets. Trading income from fixed income securities was roughly the same as a year earlier.
“We have prioritized and will continue to build risks and controls,” said Scharf. “We have clarified our strategic priorities and are leaving certain non-strategic businesses; and we have identified and are implementing a range of measures to improve our financial performance.”
Shares of Wells Fargo stock rallied more than 28% in the fourth quarter as the rollout of Covid vaccines and the prospect of more fiscal stimulus packages sparked hope for a strong economic recovery.
Despite the hefty gains, Wells shares lagged those of JPMorgan Chase, which gained nearly 32% over the same period. JPMorgan’s quarterly figures, released earlier Friday, exceed estimates on the top and bottom lines. Citigroup’s revenues were mixed.
Subscribe to CNBC PRO for exclusive insights and analysis, and live programming of working days from around the world.