Five Key Takeaways From Wells Fargo & Co (WFC) Conference Call
Wells Fargo & Co (NYSE:WFC) has delivered earnings that were in line with the Street analysts’ estimations while revenue fell shy of expectations for the second quarter. The company boosted its quarterly dividend rate by 7% as part of its program to return capital to its shareholders. The financial service provider also bought back 36 million shares in the June quarter. Let’s look at some of the other key takeaways.
Benefit From GE Capital
Wells Fargo & Co (NYSE:WFC) indicated that its growth gained from the $11.5 billion loan purchased from GE Capital in the second quarter. Its revenue advanced 1% on YOY while net interest income grew 4%. The company’s loan growth was broad based as it reached $888.5 billion and core loan portfolio grew by $68.5 billion or 9% in the June quarter. Its commercial real estate loans advanced 8% due to GE transaction impact.
The second key aspect is that the financial service provider witnessed its primary consumer checking customers by 5.6%. Its credit performance witnessed continued improvement resulting in the net charge-off rate fell to 0.3% of average loans, which is the lowest in two decades.
Thirdly, Wells Fargo & Co (NYSE:WFC) said that the recent happening in Asia, as well as, the Europe will have some implications in the Economy in the United States. However, the current economic expansion in the country remained on track as it reached the seventh year. This has happened only four other times in America’s history.
The fourth point is the labor market, which is vital for the economic expansion due to consumer spending. The company indicated that the market continued its recovery for the 57th straight months of payroll gains. As a result, the housing activity witnessed encouraging signs as the June quarter position was said to be the best quarterly performance sales after 2007.
The fifth takeaway is the credit card balances and auto loans. Both witnessed YOY growth of 14% and 7% respectively. Credit card purchase volume grew 15% due to new accounts while debit card purchase volume advanced 8%
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