Wells Fargo: stock down as consensus missed
(CercleFinance.com) - On Thursday Wells Fargo reported a decline in Q1 profit, accompanied by a drop in net banking income, which missed Wall Street estimates.
The California-based bank's quarterly net income reached 3.67 billion dollars, or 88 cents per share, in the latest quarter, compared with 4.64 billion dollars, or 1.02 dollar per share, a year earlier.
Net banking income also fell to 17.6 billion dollars from 18.5 billion dollars a year earlier, below the consensus of 17.8 billion dollars.
San Francisco based Wells Fargo said that provisions for bad loans fell to 787 million dollars from just over 1 billion dollars a year earlier.
However, the third-largest US bank in terms of assets warned that the Fed's measures to combat rising inflation would result in slower growth.
While this prospect is expected to lead to an increase in provisions for bad debts, Wells Fargo also believes it will create an environment of rising interest rates that will benefit its business.
All said, its share price was down almost 4% in pre-market trading today.
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