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Revenue was lower than the fourth quarter of 2019.
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Wells Fargo
Shares are slipping after reporting revenue by a San Francisco-based bank that was lower and weaker than the year-ago quarter.
Wells Fargo (ticker: WFC) earned $ 3.0 billion, or 64 cents a share, on revenue of $ 17.9 billion. Analysts polled by FactSet expected the bank to earn 59 cents a share, but with revenues of $ 18.1 billion. Profits were slightly higher than the fourth quarter of 2019 when they totaled $ 2.9 billion, but revenue was lower than the $ 19.9 billion year-ago figure.
Shares were down 4% in premarket trading.
Well Fargo’s credit deficit provision fell to $ 823 million, reflecting $ 757 million of reserves after selling its student loan portfolio, as well as lower net charges for bad loans.
Bank chief executive Charlie Scharf said, “Although our financial performance improved and we raised $ 3.0 billion in the fourth quarter, our results continued to impact the unprecedented operating environment and substantial legacy issues behind us. ” in a statement.
The bank’s efficiency ratio, which has been higher than its peers, grew sequentially as well as year after year. The efficiency ratio was 83% by the fourth quarter of 2020, up from 81% and 79% in the third quarter of 2020, and in the fourth quarter of 2019, respectively. Lower figures indicate that operating expenses account for a smaller share of revenue.
“With a more consistent broad-based recovery and as we continue to move forward with our agenda, we hope that you will see that this franchise is much more capable,” said Scarfe.
Beyond earnings, the bank reorganized its business units into consumer banking and lending, commercial banking, corporate and investment banking, and wealth and investment management, as it worked to become more efficient.
There were high expectations ahead of earnings news for Wells Fargo. Wells Fargo has fared worse than peers in 2020 as it continues to recover from its fake-accounts scandal. Analysts say banks are the ones with the most room for improvement.
The bank planned to host a call with analysts on Friday morning. Wall Street is hoping to find out how the bank plans to cut expenses after announcing its intention to do so in previous quarters.
Citigroup
(C) and
JPMorgan Chase
(JPM) also reported earnings on Friday.
Bank of america
(BAC),
Goldman Sachs
(GS) and
Morgan Stanley (MS)
Will report their fourth quarter results next week.
Write Carlton English at [email protected]
.