Wells Fargo first-quarter profits hurt by lower mortgage banking revenue


Wells Fargo & Co (NYSE:WFC) announced its quarterly earnings data on Thursday.

Wells Fargo also reported total average loans were $963.6 billion in the quarter, down $502 million from the fourth quarter. But amid signs that the storm over fake accounts is easing, branch employees are starting to promote new accounts to people.

Wall Street rivals have bounced back as bond and currency markets roared back to life a year ago with JPMorgan and Citi each reporting a 17 percent increase in quarterly profit on Thursday, beating analyst expectations and boosting their shares.

And after months of apologizing and calling customers to ask whether they really opened the accounts in their names, Wells executives said the bank is starting to move back into the offense.

"There was probably just some modest reduction in our expectation for loan growth. compared to the earlier guidance, certainly following the first-quarter performance", Chief Financial Officer John Gerspach said.

Regulators can eventually force Wells Fargo to shrink its balance sheet to the level it was at on September 30 if it does not appease them within two years. The bank has been dealing with the aftermath ever since. Both were ordered to forfeit promised stock awards.

In other Wells Fargo & Co news, insider David M. Carroll sold 117,704 shares of the business's stock in a transaction dated Friday, March 3rd.

Wells Fargo's earnings were released three days after the bank completed an internal investigation that clawed back $75 million from former CEO John Stumpf, and head of the Community Bank Carrie Tolstedt.

Overall, the quarterly statement showed net income of $5.5 billion on $22 billion in revenue, both figures are up slightly from the prior quarter and essentially in line with the same quarter past year. The original version of this piece of content can be accessed at Wells Fargo is the largest USA residential mortgage lender, having made more than $244 billion worth of loans in 2016, according to trade publication Inside Mortgage Finance. They were $7.7 billion lower than last quarter and down $5.7 billion year over year.

Wells Fargo, led by Chief Executive Timothy Sloan, had been one of the most consistent big banks at growing earnings and revenue in recent years.

Citigroup also highlighted strong trading results, especially in interest rate-related products.

Costs increased 6% to $13.8 billion in the March-end quarter from $13 billion from the year ago period. The bank also plans to reduce headcount in businesses such as mortgage if, as expected, business gets slower.

Citi said it earned $4.1 billion, or $1.35 a share, compared with $3.5 billion, or $1.10 a share, in the same period a year earlier. According to this price target, it now means the analyst believes there is a potential increase of 10.33% from the company's current share price of 53.48. Analysts surveyed by FactSet expected the bank to earn $1.51 a share.