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Wells Fargo WFC earnings Q3 2021

Wells Fargo sign in New York City on May 5, 2021

Getty Images| Michael Ochs Archives | Getty Images

Wells FargoOn Thursday, the company posted an increase in profits in its third quarter. This was due to the release of credit loss reserves. The pandemic recovery has accelerated in 2021.

The earnings release saw premarket trading see the bank share prices rise about 1%. Below are Wall Street’s estimates for the third quarter.

  • Net income $5.1 billion. This is 59% more than the $3.2 million earned in the same quarter last year.
  • Earnings per share are $1.17/share, up from 42 cents during 2020’s third quarter. However, it isn’t clear if the EPS was similar to expectations.
  • Revenue: $18.83billion, as compared to the consensus estimate at $18.35billion.

A $1.65 billion reserve sale, which resulted into a $1.4B benefit after chargeoffs was a major contributor to the results, said the bank in a statement. Wells Fargo released funds that it had saved during the pandemic in order to protect against loan loss.

According to the Office of the Comptroller of the Currency, the bank was fined $250 million for “unsafe and unsound” practices related to the loan modification program.

Charlie Scharf, CEO of the company said that “We’re a completely different organization today” and added, Thursday, in a statement. Although we will face some setbacks, we believe we’re making progress.

Wells Fargo had its net interest income drop by 5%, due to lower earnings and higher prepayments.

Wells Fargo purchased 114.2 million shares (or $5.3 billion) of its common stock during the third quarter 2021. In addition, the bank increased its common stock dividend from $0.10 to $0.20.

The bank paid $72.6 million to settle a government lawsuitLast month’s filing revealed that the bank was being accused of fraudming hundreds of commercial clients. Wells admitted that he overcharged 771 businesses for foreign currency transactions between 2010 and 2017.

Wells Fargo’s shares have risen more than 50% in this year, thanks to an economic recovery that saw them recover from a loss of over 40% in 2020.

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Mike Robinson
Mike covers the financial, utilities and biotechnology sectors for Street Register. He has been writing about investment and personal finance topics for almost 12 years. Mike has an MBA in Finance from Wake Forest University.