Wells Fargo & Co (WFC) Beats But Provision for Credit Losses Jump 87% in 1Q
Wells Fargo & Co (NYSE:WFC) disclosed that its provision for credit losses jumped 87% in the first quarter to $608 million from $325 million in the year-ago quarter. Despite this, its earnings came in above the Street analysts’ expectations while revenue came in line with the predictions.
Wells Fargo & Co (NYSE:WFC) Chairman and CEO, John Stumpf, said that the company continued to strengthen its relationships with the customers. He added that it reflected in the robust uptick in deposits, as well as, primary checking customers. Apart from this, its mortgage business could add more customers through refinancing of mortgage loans by offering cheaper rates of interest.
The financial services provider indicated that it received a no-objection to its capital plan of 2015. This included a planned increase of the dividend rate to 37.5 cents a share in the second quarter of the current year.
Wells Fargo & Co (NYSE:WFC) said that its credit quality continued to be strong since net charge-offs witnessed a fall. Since expenses started to fall from the fourth quarter, its efficiency ratio improved to 58.8%. The company indicated that it was on target to achieve return on assets, as well as, equity, efficiency ratio and payout ratio.
The bank earned a profit of $5.8 billion or $1.04 a share in the first quarter. In comparison, it earned a profit of $5.9 billion or $1.05 a share in the year-ago quarter. Twenty-eight analysts predicted the company to report earnings of 98 cents a share for the first quarter.
Wells Fargo & Co (NYSE:WFC) generated revenue of $21.3 billion representing 3% YOY growth. This was in line with the Street analysts’ projection of $21.24 billion. The company’s total average loans grew 5% to $863.3 billion whereas quarter-end loans advanced 4% to $861.2 billion. Total average deposits increased 9% to $1.2 trillion in the first quarter. Its net interest margin slipped to 2.95% from 3.2% in the previous year quarter and 3.04% in the fourth quarter.
Full Release: here
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