Wells Fargo profits are best guess as it releases $ 1.7 billion in loan loss reserves

Wells Fargo & Co. Inc. WFC,
-1.29%
said on Thursday it had $ 5.122 billion, or $ 1.17 per share, in the third quarter, up from $ 3.216 billion, or 70 cents per share, in the prior year period . Revenue fell to $ 18.834 billion from $ 19.316 billion. The FactSet consensus was for EPS of $ 1.00 and revenue of $ 18.273 billion. The bank said it freed up $ 1.7 billion from its bad debt reserve, which equates to a 30-cent increase in EPS. He also recorded a charge of $ 250 million, or 5 cents per share, for an enforcement action taken by the Office of the Comptroller of the Currency regarding unhealthy mortgage lending practices. The bank said average loans fell to $ 854.0 million from $ 931.7 million a year ago. Average deposits increased from $ 1.399 billion to $ 1.451 billion. “Charges were low, net interest income stabilized and end-of-period loans increased for the first time since the first quarter of 2020,” Managing Director Charlie Scharf said in a statement. Net interest income fell to $ 8.909 billion from $ 9.379 billion a year ago, due to falling loan balances. Non-interest income edged down from $ 9.937 billion to $ 9.925 billion as improved private equity and venture capital performance and higher card, deposit and credit fees. Investment banking were offset by lower mortgage banking income, lower gains on the sale of securities and lower income markets. In the bank’s retail operations, home loans fell to $ 2.012 billion from $ 2.527 billion. “The decline in mortgage banking income is mainly due to lower sales margins and lower originations, as well as lower management fees, partially offset by higher gains from loan re-securitization than we bought from mortgage backed securities last year. , the bank said. Shares are up 0.5% pre-market and gain 53% year-to-date, while the S&P 500 SPX,
+ 0.30%
gained 16%.

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