Wells Fargo released the earnings results from its second quarter before opening bell this morning, posting earnings of $1.03 per share on revenue of $21.3 billion. Analysts had been looking for earnings of $1.03 per share and revenue of $21.7 billion. In the same quarter last year, the firm posted $21.1 billion in revenue and $1.01 per share in earnings.
Key metrics from Wells Fargo’s earnings report
Wells Fargo reported a return on assets of 1.33% and return on equity of 12.71%. The firm saw total average loans climb 5% to $870.4 billion and recorded $888.5 billion in quarter-end loans, a 7% increase from last year. Total average deposits rose 8% to $1.2 trillion. Net charge-offs fell $67 million to $650 million. The net charge-off rate fell from 0.35% last year to 0.3% this year. Wells Fargo released $350 million in reserves.
The Common Equity Tier 1 Basel III ratio was 10.5%.
Welcome to our latest issue of ValueWalk’s hedge fund update. Below subscribers can find an excerpt in text and the full issue in PDF format. Please send us your feedback! Featuring investors exit long-short hedge funds, the oil market is now "broken", and Haidar Capital surges 225%. Q2 2022 hedge fund letters, conferences and more
Wells Fargo’s earnings by division
Wells Fargo reported total revenue of $12.66 billion in its Community banking division. Net income for the division was $3.36 billion in the second quarter, an 8% decline from last year’s second quarter. The firm’s Regional Banking reported a 5.6% increase in primary consumer checking customers and a cross-sell ratio of 6.13 product per household for its Retail Bank segment. Business Banking, the firm saw a 5.3% increase in primary business checking customers.
The bank’s Wholesale Banking division recorded $6.08 billion in revenue, a 3% increase, and $2 billion in net income, a 12% year over year increase. Average loans rose 12% year over year, while total assets under management declined $2 billion because equity and stable value outflows more than offset higher inflows from fixed income net clients.
Wells Fargo’s Wealth Brokerage and Retirement division saw a 7% increase in net income to $602 million, while revenue increased to $3.7 billion. In Retail Brokerage, client assets increased 1% to $1.4 trillion, while managed account assets rose 6% to $434 billion. In Wealth Management, client assets increased 2% year over year to $224 billion, and IRA assets also increased 2% in the quarter, climbing to $365 billion.
As of this writing, shares of Wells Fargo were down 1.55% at $55.86 per share.