Wells Fargo’s fourth-quarter net income, released on Friday, topped analysts’ estimates as the U.S. economic recovery encouraged borrowing and the bank kept tight control over costs. .
Profit jumped 86% to $5.8 billion, driven by a $943 million gain from the sale of units including asset management.
According to estimates by Refinitiv, Wells Fargo earned $1.25 a share, excluding items, compared with an average analyst forecast of $1.13.
Total revenue increased 13% to $20.9 billion, also beating estimates of $18.9 billion.
Overall, the bank’s core business posted strong numbers, with year-end loans issued up 1% year-on-year and 4% higher than the previous quarter.
“The changes we have made to the company and the strong prospects for continued economic growth make us feel good about where we are positioned in 2022,” Chief Executive Charlie Scharf said in a statement.
Non-interest expense fell 11% to $13.2 billion, driven by lower personnel costs, restructuring charges and operating losses, capping a year of aggressive cost-cutting at the bank.
Wells Fargo stock was largely flat in premarket trading, having gained 20% since the start of the year.
Wells Chief Financial Officer Mike Santomassimo told reporters that the bank is seeking an additional $3.3 billion in cost cutting in 2022.
Scharf, who has made cost-cutting the cornerstone of his turnaround plan, is targeting an annual savings of $10 billion in the long term.
The fourth-largest US bank has been in the crosshairs of regulators since 2016, when a scandal related to sales practices erupted and led to the institution paying billions of dollars in fines and refunds.
Wells Fargo also operates under a $1.95 trillion asset cap imposed by the Federal Reserve in 2018, which has hampered its ability to raise interest income by improving loan and deposit growth.
“We also remain aware that we still have a multi-year effort to satisfy our regulatory requirements – with setbacks that are likely to continue along the way – and we continue our work to leave behind exposures related to our historic practices,” said Scharf.
Reference: CNN Brasil
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