Wells Fargo (NYSE:WFC) shares rose on Friday after the bank posted quarterly revenue that exceeded analysts’ expectations and a significant jump in profit.
Earnings per share came in at an adjusted $1.25 per share, excluding certain items, topping the consensus estimate of $1.13 per share. Revenues proved to be $20.856 billion, topping consensus estimate of 18.824 billion.
Net income registered $5.75 billion, an 86% increase from $3.09 billion a year ago. Results were helped by a $875-million reserve release that the bank had set aside during the pandemic to safeguard against widespread loan losses.
"As the economy continued to recover we saw increased consumer spending, higher investment banking fees, higher asset-based fees in our Wealth and Investment Management business, and strong equity gains in our affiliated venture capital and private equity businesses," Wells Fargo CEO Charlie Scharf said.
Scharf also noted that after starting the year weak, lending began to pick up in the second half of 2021 with 5% growth in loans from its consumer and commercial portfolios in the final six months.
After struggling for years, Wells Fargo finally has the wind at its back.
The quarterly results showed it is not yet seeing that benefit with net interest income for the fourth quarter falling slightly to $9.26 billion from a year ago.
The bank repurchased 139.7 million shares, or $7.0 billion, of common stock in fourth quarter 2021.
WFC shares gained $1.40, or 2.5%, to $57.40.
