Wells Fargo's Profit Rises To $6 Billion In Latest Quarter
NEW YORK – Wells Fargo, still haunted by multiple scandals, reported higher earnings in the third quarter Friday but still fell short of what analysts were looking for.
Wells saw its earnings jump to $6 billion from $4.5 billion in 2017's third quarter, although last year the bank had to set aside $1 billion for legal expenses related to its mortgage practices before the financial crisis.
The San Francisco-based bank earned $1.13 a share, less than the $1.17 expected by analysts surveyed by Zacks Investment Research.
The company's revenue was up slightly from the same period last year at $21.9 billion.
The bank has faced several investigations in recent years over practices including the opening of accounts without customers' consent, charging clients for unnecessary insurance policies, and imposing unfair fees tied to mortgage rates.
While its rivals are benefiting from rising interest rates and the Republican-passed tax law, due to the numerous scandals, Wells has been ordered by the government to halt growth until further notice.
Wells announced last month that it planned to cut up to 10 percent of its workforce over the next three years. The bank, which employs about 265,000 workers, announced in June that it would sell more than 50 retail branches in the Midwest and would reduce the number of branches it operates to about 5,000 by the year 2020.
The nation's largest mortgage lender reported that its net interest income ticked up just slightly to $12.6 billion, from $12.5 billion in the year-ago period. That's despite rapidly rising interest rates, which would typically benefit a bank like Wells.
On Thursday, mortgage buyer Freddie Mac said the rate on 30-year, fixed-rate mortgages jumped to an average 4.90 percent from 4.71 percent last week. That's the highest level for the benchmark rate since April 2011. A year ago, it was 3.91 percent.
Wells Fargo's stock edged down 0.6 percent to $51.13. They've fallen 16 percent since the beginning of the year and 7.6 percent over the last 12 months.
By Matt Ott