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HomeNewsWells Fargo (WFC) Revenues Q2 2021 - News

Wells Fargo (WFC) Revenues Q2 2021 – News

Wells Fargo On Wednesday, Wall Street continued to release the funds it had set aside during the Covid-19 pandemic to protect it from widespread bad debt losses, resulting in higher-than-expected second-quarter earnings and earnings. I reported the result.

Immediately after the opening bell after the announcement of financial results, the bank’s stock price rose 2%. Here’s how we compared it to the Wall Street quote for the second quarter:

  • Revenue: According to Refinitiv, earnings per share was $ 1.38, an expected 97 cents per share. This is a sharp reversal from the losses incurred in the second quarter of 2020.
  • Revenue: $ 20.27 billion, compared to $ 17.77 billion expected by Refinitiv, reflecting a 10% increase compared to the same quarter a year ago

Wells Fargo’s performance was boosted by the release of a $ 1.6 billion credit loss reserve as consumers exceeded bank expectations during the pandemic recession. With the acceleration of recovery in 2021 and the resulting increase in profits, financial companies began to release these reserves.

Wells also reported that the net interest margin for the quarter was 2.02%, a measure of the amount obtained from the difference between the amount a bank pays on a deposit and the amount it receives on a loan. According to FactSet, analysts expected 2.05%. Persistently low interest rates continue to weigh that part of the banking business.

CEO Charlie Schaff said in a press release that bank lending demand has subsided somewhat despite the economic recovery.

Wells Fargo CEO Charles Schaff will listen at a hearing of the House Financial Services Commission in Washington, DC, USA on Tuesday, March 10, 2020.

Andrew Haller | Bloomberg | Getty Images

“Wells Fargo benefited from continued economic recovery, a strong market that helped increase profits in related venture capital businesses, and progress in improving efficiency, but low and low interest rate loans, Schaff said in a statement. Demand continued to have headwinds. ” .. “Our top priority remains to build the right risk and control infrastructure for our size and complexity enterprises, continue to invest in additional resources, and a great deal of management in this task. Attention is paid to. “

Scharf, who took over in late 2019, is focusing on improving the company’s cost and public image after a fake account scandal in 2016 triggered scrutiny from federal lawmakers and repeatedly withdrawn from the company’s top brass. ..

In response, the Federal Reserve has restricted bank asset growth and forced new bank executives to focus on expenses.

Banks reported an efficiency rate of 66% compared to FactSet’s estimate of 76.1%. This shows that operating expenses, which are proportional to revenue, improved from 80% in the June 2020 quarter.

Financial information updates from San Francisco-based lenders took place almost a week after CNBC reported. Shut down all existing personal lines of credit In the coming weeks, we have stopped offering our products.

Wells Fargo’s credit line allowed customers to borrow between $ 3,000 and $ 100,000. Banks have charged Line as a means of consolidating high-interest credit card debt, paying home renovations, or avoiding overdraft fees for linked checking accounts.

Wells said in a letter to customers that the move would allow him to focus on credit cards and personal loans.

The move has offended some customers, but Wells has posted a comeback in 2021 amid a US economic recovery thanks to the resumption of normal business operations.

Improving the employment market and accelerating fixed investment through the deployment of the Covid-19 vaccine has helped the bank’s stock market breeze with the broader stock market since January.

Wells Fargo is up 43.2% this year, and Bank of America and JP Morgan Chase are up 31.5% and 22.4%, respectively. The S & P 500 is up 16.3% over the same period.

Of the six largest banks in the United States, Wells has the smallest trading and investment banking sector. This is an area where peers have grown in recent months thanks to initial public offerings and simple monetary policy.

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