Wells Fargo blames missed revenue target on fewer consumer loans
However, the bank managed to make good on its promise to reduce costs to combat expenses related to a 2016 sales scandal
Bengaluru/New York — Wells Fargo reported quarterly revenue that missed analysts’ estimates on Tuesday, as revenue across all its banking units declined, especially at community banking, the unit at the centre of its 2016 sales scandal.
Shares of the San Francisco-based lender were down 1.22% at $48.42 in early trading.
The bank's total revenue fell 5% to $20.98bn in the fourth quarter, while consumer loans fell 3%. Analysts on average were expecting revenue of $21.73bn, according to IBES data from Refinitiv.
Wells managed to make good on its promise to reduce costs to combat expenses related to its sales scandal. Noninterest expenses fell 21% to $13.34bn.
For the year, expenses declined 4% to $56.13bn, but were higher than $54.5bn target the bank had set in 2018.
CFO John Shrewsberry reiterated that the bank was "on track" to meet its 2019 expense target. Net income applicable to shareholders was $5.71bn, or $1.21 per share, in the fourth quarter ended December 31, compared with $5.74bn, or $1.16 per share, a year earlier.
The year-ago quarter included a $3.35bn one-time boost related to President Donald Trump's US corporate tax overhaul.
Analysts on average were expecting $1.19 per share, according to IBES data from Refinitiv. It was not immediately clear if the reported figures were comparable.
Earlier in the day, JP Morgan Chase reported a lower than expected quarterly profit due to weakness in its markets trading business, sending its shares down 3% in early trading.