(Tiper Stock Exchange) – Wells Fargothe fourth largest US bank, recorded a Net income of $4.938 billion, or $1.25 per share, in second quarter of 2023, compared to $3.142 billion (+57%), or 75 cents per share, a year ago (+67%). THE total revenue they increased 20% to $20.53 billion. The analysts they expected average earnings per share of $1.16 on revenues of $20.12 billion, according to Refinitiv data.
The interest margin (NII) it increased 29% to $13.16 billion, primarily due to the impact of higher interest rates and larger loan balances, partially offset by smaller deposit balances.
The non-interest income increased 8% to $7.37 billion, driven by higher trading revenues in Markets and lower writedowns in venture capital and private equity, partially offset by lower deposit-related fees, a decline in asset-based fees in Wealth and Investment Management due to lower market valuations and lower net gains on debt sales.
L’provision for credit losses Q2 2023 includes a $949 million increase in credit loss compensation primarily for commercial real estate office loans, as well as increased credit card loan balances.
“We have recorded solid results in the second quarter – commented the CEO Charlie Scharf – Our strong NII continued to benefit from higher interest rates and we remained focused on controlling expenses. As expected, net chargebacks on loans increased from the first quarter. Consumer charge-offs continued to deteriorate slightly. Commercial charge-offs have increased due to a limited number of borrowers in Commercial Banking, with little sign of systemic weakness across the portfolioand higher losses in commercial real estate, primarily in the office portfolio.”
“L’US economy continues to perform better than many expected and, while there is likely to be a continued economic slowdown and uncertainties remain, it is entirely possible that the range of scenarios will narrow in the coming quarters,” he added.