Wells Fargo Shares And Revenues Rise After First-Quarter Profits  

Wells Fargo posted greater earnings on Friday, despite building up loan loss reserves, as the bank benefitted from rising interest rates.

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Here's how Wells Fargo performed in the first quarter vs Refinitiv estimates:

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Profits per share: $1.23 per share on a GAAP basis, compared to 90 cents a year ago and $1.13 projected.

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Revenue: $20.73 billion, compared to the estimated $20.08 billion.

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After the results were released, the bank's shares were up around 1% in early trade.

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Wells Fargo improved its net profits by more than 30% year on year to almost $5 billion in the first quarter. The bank said that its net interest income, which is the difference between what it earns from lending money and what it pays out to clients, jumped by 45% as interest rates rose. Sales increased by 17%.

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"In the first quarter, we achieved good results, including revenue increase from both the fourth quarter and a year ago, and we continued to make progress on our efficiency measures," CEO Charlie Scharf said in a statement.

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Yet, the bank set aside $1.2 billion for credit losses in the most recent period, after decreasing its provisions by $787 million the previous year. The provision includes an increase of $643 million for probable losses on commercial real estate, credit card, and auto loans.

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While interest income increased, Wells Fargo reported a 13% fall in noninterest revenue in the quarter, owing to poorer performance in its associated venture capital and private equity businesses, as well as a decrease in mortgage banking income.

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Wells Fargo, formerly the dominant mortgage lender, has abandoned the housing sector. It just fired off hundreds of mortgage bankers as part of a broad round of layoffs prompted by the bank's recent strategy change.

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"Going ahead," Scharf added, "We continue to move forward on our risk and control agenda, which is our top priority." "Although we have made progress, our job is not over, and we are committed to finishing it on schedule."

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Wells Fargo restarted its share repurchase program during the quarter, buying back 86.4 million shares, or $4.0 billion, of common stock.

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In April, the stock gained 7%, reducing its 2023 losses to around 3%.

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