Wells Fargo & Company (NYSE:WFC) has reported first-quarter earnings and revenue that beat consensus estimates, sending its shares more than 4% higher in pre-market trade.
The bank benefited from higher interest rates during the quarter, but that also came with a rise in provisions for credit losses.
Revenue increased by 17% to $20.7 billion in the three months to March 31, 2023, ahead of the $20.1 expected by Wall Street. Net income jumped 32% to $4.99 billion, resulting in diluted earnings per share of $1.23, up 35% and beating the $1.13 expected by the Street.
“We had strong results in the first quarter including revenue growth from both the fourth quarter and a year ago, and we continued to make progress on our efficiency initiatives,” CEO Charlie Scharf said in a statement.
“Delinquencies and net charge-offs continued to slowly increase, as expected. Our CET1 ratio, which was already strong, increased and we resumed our repurchase program, buying back $4 billion in common stock.”
The bank set aside $1.2 billion for credit losses, including a $643 million increase for potential losses related to commercial real estate, credit card and auto loans.
Silicon Valley Bank
Wells Fargo was among the large US banks that reported significant increases in deposits following the collapse of Silicon Valley Bank in early March.
“We are glad to have been in a strong position to help support the US financial system during the recent events that impacted the banking industry,” Scharf added.
“Regional and community banks are an important part of our financial system and are uniquely positioned to serve their customers and communities. We believe our own franchise offers many benefits including operating at a broad scale with a large branch network.”
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