Wells Fargo (WFC) 2021 Q1 Financial Results Preview

Wells Fargo & Co (NYSE:WFC) traces its roots back to 1852 when Henry Wells and William Fargo established the company to provide banking and express delivery services. Back then, Wells Fargo used to buy and sell gold, besides offering rapid delivery of valuable items. The company earned the trust and good reputation over the years that helped it to become one of the leading banks in the United States.

The San Francisco-based bank recently announced better-than-expected financial results for the first quarter. Wells Fargo reported earnings of $4.742 billion, or $1.05 per share for the three months ended March 31, well above $653 million, or 1 cent per share in the comparable period of 2020. Analysts on average were looking for earnings of 71 cents per share.

Speaking on the results, CEO Charlie Scharf said in a statement, “Our results for the quarter, which included a $1.6 billion pre-tax reduction in the allowance for credit losses, reflected an improving U.S. economy, continued focus on our strategic priorities, and ongoing support for our customers and our communities. Charge-offs are at historic lows and we are making changes to improve our operations and efficiency, but low interest rates and tepid loan demand continued to be a headwind for us in the quarter.”

Revenue came in at $18.063 billion, as compared to $17.717 billion in the year-ago quarter, and above the consensus forecast of $17.518 billion. If we look at the performance of key segments on a year-over-year basis:

-Revenue at the consumer and small business segment fell 6 percent.
-Home lending revenue jumped 19 percent.
-Credit card revenue slipped 2 percent.
-Revenue at the auto segment rose 6 percent.
-Personal lending revenue plummeted 18 percent.
-Corporate and investment banking revenue decreased 6 percent.

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