Another of the big banks on Wall Street is in the news Friday, as Wells Fargo (NYSE:WFC) reported growing profits as the bank benefited from higher interest rates, despite building up loan loss reserves.
Wells Fargo boasted earnings per share of $1.23 per share GAAP versus 90 cents a year ago and $1.13 expected. Revenue was $20.73 billion versus $20.08 billion expected.
Wells Fargo increased its 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.
However, 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.
The bank resumed its share repurchase program during the quarter, buying bank 86.4 million shares, or $4.0 billion, of common stock.
The stock is up 6% in April, trimming its 2023 losses to about 4%. Shares had trouble getting untracked early Friday to remaining at $39.66, where they had closed Thursday.
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