Wells Fargo&Co Earnings, Revenue beat in Q1

Wells Fargo&Co Earnings, Revenue beat in Q1

Wells Fargo on April 12 reported $5.5 billion of earnings attributable to common shareholders for the first quarter of 2019, in its first set of results since Tim Sloan resigned as the US bank's chief executive.

Net interest margin, the difference between what a bank charges borrowers and pays depositors, rose 7 basis points from a year earlier as banks continue to benefit from the Federal Reserve's past rate hikes.

Wells Fargo & Co today reported a 16.4% jump in quarterly profit, as the USA lender reaped the benefits of its aggressive cost-cutting efforts. The higher efficiency ratio indicates that the bank is spending more money than it is making, according to CNBC. The board is searching for a new leader outside the bank. Interim CEO Allen Parker's comments in Friday's release are simply a placeholder until the bank appoints a permanent leader to attack the issues limiting growth. He did not give a timetable for when a new CEO might be announced. Deutsche Bank downgraded Wells Fargo & Co from a "buy" rating to a "hold" rating and cut their price target for the company from $56.00 to $54.00 in a report on Friday, March 29th. But the longer-term outlook is less certain, since the bank suspended its expense targets for 2020 after Sloan's departure. That contrasts with J.P. Morgan Chase & Co.'s stock JPM, +4.51% which surged 4.4% to pace the other 65 components gaining ground, after the bank reported a first-quarter profit and revenue that rose above expectations.

Wells Fargo expects net interest income to fall 2 percent to 5 percent this year from 2018. It previously forecast between a 2% rise and a 2% fall. During the trading session, a total of 30.79 million shares were traded which represents a -43.35% decline from the average session volume which is 21.48M shares. The company cited ongoing strong credit performance and high levels of liquidity as the drivers of earnings growth.

"Between bigger banks there seems to be some disagreement about where we are in the cycle", he said. The banking giant posted diluted earnings per share (EPS) of $1.20 on revenue of $21.6 billion.

As of 1333 BST, shares of Wells Fargo were changing hands at $48.11 in pre-market trading, which was 0.78% higher than a year ago. The decrease from a year prior was due to a decline in the bank's noninterest income, which fell to Dollars 9.3 Billion. The company is targeting expenses for 2019 of $52 billion to $53 billion.

Revenues were $29.9 billion, up 4.7 percent. As signs of a slowing USA economy mount, analysts have focused on efficiency in anticipation of slower revenue and loan growth. The bank's efficiency ratio was also 64.4% for the quarter, also above estimates. Average deposits were down 1 percent from the previous quarter and fell 3 percent from a year earlier.

Average loans were $950.1 billion in the first quarter, up $3.8 billion from the fourth quarter.

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