Wells Fargo & Company (NYSE:WFC) said first-quarter profit rose 5.5% as a lower tax rate offset a drop in revenue at the US lender.
Net income climbed to US$5.94bln, or US$1.12 a share, from US$5.6bln, or US$1.03, a year earlier. That beat the per-share market consensus estimate of US$1.06 a share. Wells Fargo’s revenue fell 1.8% to US$21.9bn. The earnings figures are preliminary as the company awaits the outcome of US$1bn settlement talks with regulators over the sales of auto insurance and mortgage products.
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Shares of the company advanced 1.3% to US$53.40 pre-market trading.
“I’m confident that our outstanding team will continue to transform Wells Fargo into a better, stronger company; however, we recognize that it will take time to put all of our challenges behind us,” Chief Executive Officer Tim Sloan said in the statement.
The bank was sanctioned by the US Federal Reserve Board in February for “widespread consumer abuses and other compliance breakdowns”. Because the Fed felt that the bank was placing growth ahead of risk management, Wells Fargo was prohibited from rising above US$1.95trn in assets at the end of 2017.