Wells Fargo ended the second quarter with a significant drop in revenue and profit as its figures were pressured by the sequestration of funds for “red loans”, following in the footsteps of JP Morgan and Morgan Stanley which also came in below expectations yesterday.
In particular, the American bank announced that its revenues amounted to 17.03 billion dollars against an estimate of 17.53 billion dollars.
Similarly, Wells Fargo’s earnings per share came in at 74 cents, including impairments of 8 cents/share, having plummeted to $3.12 billion from $6.04 billion in the same period last year ($1.38/share ).
Analysts polled by Refinitiv had expected Wells Fargo’s earnings to fall to 80 cents a share, but it was unclear whether the numbers were comparable given the decline.
The bank said “market conditions” forced it to record a $576 million write-down on equity securities linked to its venture capital, while also showing a $580 million write-down in the quarter.
Last month, Wells Fargo executives disclosed that mortgage income was on track for a 50% drop in the second quarter as sharply increased interest rates curtailed its business.
It is noted that after the announcement of its results, the bank’s stock fell by up to 3% in pre-conference trading, while since the beginning of the year it has lost 19% of its value.
Source: Capital
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