Wells Fargo's fourth-quarter revenue tops estimate, profit jumps
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Wells Fargo on Friday posted quarterly revenue that exceeded analysts' expectations and a significant jump in profit.
Shares of the bank climbed 3.7% following the earnings announcement.
Results were helped by a $875 million reserve release that the bank had set aside during the pandemic to safeguard against widespread loan losses.
«As the economy continued to recover we saw increased consumer spending, higher investment banking fees, higher asset-based fees in our Wealth and Investment Management business, and strong equity gains in our affiliated venture capital and private equity businesses,» Wells Fargo CEO Charlie Scharf said in a statement.
Scharf also noted that after starting the year weak, lending began to pick up in the second half of 2021 with 5% growth in loans from its consumer and commercial portfolios in the final six months.
«We continued to manage credit well and the strong economic environment helped reduce charge-offs to historical lows and our results benefitted from reductions in our allowance for credit losses,» Scharf added.
After struggling for years, Wells Fargo finally has the wind at its back.
The fourth biggest U.S. bank by assets is considered by analysts to be one of the best plays for a rising interest rate environment because of its vast retail banking network and large deposit base. Rising rates allow banks to charge more for loans, fattening their profit margins.
The quarterly results showed it is not yet seeing that benefit with net interest income for the fourth quarter falling slightly to $9.26 billion from a year ago.
The bank repurchased 139.7 million shares, or $7.0 billion, of common stock in fourth quarter 2021.
The company's stock bested peers last year, surging
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