Three Wells Fargo ATM’s on 14th street, New York City.
Lindsey Nicholson | Universal Images Group | Getty Images
Wells Fargo reported growing profits Friday morning as the bank benefited from higher interest rates, despite building up loan loss reserves.
Here’s how the bank did compared with Refinitiv estimates:
- Earnings per share: $1.23 per share GAAP versus 90 cents a year ago and $1.13 estimate.
- Revenue: $20.73 billion versus $20.08 billion expected
The bank’s shares were up more than 3% in premarket trading after the earnings report.
Wells Fargo increased net income by more than 30% to nearly $5 billion in the first quarter from a year ago. The bank said its net interest income, what it makes lending money minus what it pays out to customers, increased 45% on the back of soaring interest rates.
“We had strong results in the first quarter including revenue growth from both the fourth quarter and a year ago, and we continued to make progress on our efficiency initiatives,” CEO Charlie Scharf said in a statement.
In the latest period, the bank set aside $1.2 billion for credit losses after reducing its provisions by $787 million a year ago. The provision included a $643 million increase for potential losses related to commercial real estate, credit card and auto loans.
Wells Fargo, once the No. 1 player in mortgages, has stepped back from the housing market. The bank recently laid off hundreds of mortgage bankers as part of a sweeping round of cuts triggered by the bank’s recent strategic shift.
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