LONDON (ShareCast) - (Sharecast News) - Banking giant Wells Fargo posted a drop in quarterly earnings on Friday as its efforts to build up reserves cut into profits.
Wells Fargo reported quarterly earnings of $0.85 per share, down from $1.17 per share at the same time a year earlier, on revenues of $19.50bn, ahead of expectations of $18.75bn.

However, Wells Fargo also said its third-quarter trading performance had been "significantly impacted" by $2.0bn in operating losses related to litigation, customer remediation, and regulatory matters. Wells Fargo put aside $784.0bn in provisions for credit losses.

Net interest income increased 36%, primarily due to the impact of higher interest rates, higher loan balances, and lower mortgage-backed securities premium amortisation but this was partially offset by lower interest income from Paycheck Protection Program loans and loans purchased from securitisation pools.

Non-interest income decreased by 25%, driven by a decline in mortgage banking income on lower originations and gain on sale margins, as well as lower gains from the resecuritisation of loans purchased from securitisation pools.

Non-interest expenses increased by 8%, driven by higher operating losses on higher accruals primarily related to a variety of historical matters.

As of 1220 BST, Wells Fargo shares were up 1.46% in pre-market trading at $43.0 each.





Reporting by Iain Gilbert at Sharecast.com

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