Wells Fargo Q1 profit beats forecasts, despite scandal

Katie RamirezApr 14, 2017

On 8/8/2016 Timothy J Sloan, COO, sold 20,500 with an average share price of $48.92 per share and the total transaction amounting to $1,002,860.00.

JPMorgan also reported solid loan growth in the quarter across both its consumer and business lending businesses. And in two weeks, Wells Fargo will hold its annual shareholder meeting amid a push to get rid of the company's board of directors. JPMorgan expects to add another US$400 million to its net interest income in the second quarter.

However, the bank's expenses for salaries and other non-interest costs rose by almost four times that amount due to higher legal costs and greater spending on compliance programmes.

JPMorgan's stock fell $1, or 1.2 percent, to close Thursday at $84.40. Profit rose to $1.00 beating the average analyst estimate or $.97 cents. The recent uptick in interest rates has crushed a wave of mortgage refinancing that kicked off in 2010, leading to big declines in mortgage banking revenue. Analysts had expected $1.24.

Consumers opened 35% fewer checking accounts with Wells Fargo in March than they did the same period a year ago, the bank said Thursday.

Over the last twelve months Wells Fargo & Company's stock price has increased from 47.55 to 51.83, a change of 8.99%.

However, Citi's consumer banking division saw a drop in profits. Mortgage banking posted a drop to $1.5 billion in income for Q1 2017 from Q4 2016's $1.6 billion.

Among the reforms, Wells Fargo has addressed a "siloed" corporate structure that meant the problems in retail banking were not scrutinised more broadly.

With the fewest US branches of any large competitor, Citigroup is counting on its credit-card franchise to drive growth in North America.

Credit-card applications plunged by 42 percent, to 200,000, during the first three months of the year, the bank said in its earnings release.

Wells Fargo & Co, which has been mired in litigation stemming from a sales scandal, posted a almost flat first-quarter profit, hurt by lower mortgage banking revenue and higher expenses, Reuters reported.

That's on top of the $185 million fine Wells Fargo paid previous year when news of the scandal first broke, and much more than the $40 million to $50 million the bank had expected to spend on those costs for the quarter when it last reported earnings in January.

Both banks also benefited from lower reserves compared with the January-March period past year, when they set aside hundreds of millions of dollars to protect against the possibility of energy defaults due to the oil industry slump.

Wells Fargo is paying hundreds of millions of dollars to fix the damage from its sales scandal in which employees opened as many as 2 million fake accounts for consumers without their permission.

"Clearly we have had a very hard period in our history", Timothy Sloan, Wells Fargo's chief executive officer, told analysts during a conference call to discuss the results.

The company has established a "rebuilding trust office" that includes staff dedicating 100 per cent of its time to implementing the consent decrees with regulators.

If the Trump administration's deregulation and tax reform policies never get through, Goldberg said: "As long as the USA economy continues to expand we think [shareholder] downside is fairly limited".

San Francisco-based Wells Fargo generated $22 billion in revenue during the January-through-March period, down 0.9 percent from the year-ago first quarter. Its adjusted revenue was $22 billion, falling short of Street forecasts of $22.13 billion, according to Zacks.

Related Articles:



« Previous article
Next article »


Popular Pages

What the Samsung S8 means for the iPhone 8
Today we're going to take a closer look of what's expected of iPhone 8 and see if it will be able take on Samsung's Galaxy S8. Samsung has officially unveiled the latest addition to Galaxy premium range, the Galaxy S8 at its Unpacked 2017 event in NY .

Apple is developing in-house power management chips, German analyst reports
Power management chips handle the amount of voltage and how much charge is supposed to go across the components in the device. This proves yet again how important Apple's iPhone business really is, especially to smaller companies.

Bookies slash odds on Arsenal ace Alexis Sanchez joining Tottenham to 3/1
However, the player reportedly wants to stay in England's capital and Ladbrokes have installed Spurs at odds of 3/1. Arsene Wenger has been left mystified by Arsenal fans' concerns over the future of Alexis Sanchez .

Bangladesh PM meets Indian opposition leader Sonia Gandhi
Banerjee's position is that the treaty would render north Bengal dry and affect farmers of her state. However, he said they are open to discussion on sharing the waters of joint rivers.

Sensex, Nifty rise after 3 days of falls; financial, IT stocks boost
The gauge had dropped by 398.50 points of 1.33 percent in previous three days. Market breadth was positive with 1,622 advances against 1,102 declines.

Budget Session a "winner" for govt: Modi
A senior Shiv Sena functionary confirmed that Uddhav and Yuva Sena chief Aaditya Thackeray were also going for the meeting. While Modi and Uddhav have met each other at government functions, they haven't shared any political space since 2014.

Tyga detained by police
Of course, the rapper was filmed while being arrested, video which showed Tyga saying that he had just bought the vehicle . Wednesday in Hollywood because he was driving a Mercedes G Wagon with paper plates, LAPD told the Daily News.

Alli deserves Player of the Year nomination - Pochettino
The English youngster even finds time to formulate intricate goal celebrations involving a variety of handshakes with teammates. But many Reds thinks Sadio Mane's exclusion is unfair and have taken to Twitter to air their disappointment.

Despite The Delay, the iPhone 8 Brings Good News As Well
However, the release date of the anticipated iPhone 8 might be delayed due to 3D sensing technology issues. Apple-related news chains are filled with rumours on the premium iPhone 8 model costing in excess of $1000.

David Moyes not giving up on Sunderland's survival
With games against leaders Chelsea and fifth-placed Arsenal still to come, Moyes knows that time is running out for his team. Hopefully that game can be this weekend.