Wells Fargo posted fourth-quarter net income of $5.8 billion on Friday (Jan. 14), an 86% increase over last year’s $3.09 billion, according to the bank’s earnings report.
Revenue of $20.9 billion beat forecasts of $18.8 billion, per Refinitiv data, and earnings per share of $1.25 topped the consensus estimate of $18.824 billion.
“The changes we’ve made to the company and continued strong economic growth prospects make us feel good about how we are positioned entering 2022,” Wells Fargo CEO Charlie Scharf said in the report.
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“In 2021, we improved our financial returns, including reducing our expenses and returning a significant amount of excess capital to our shareholders by increasing our dividend and repurchasing $14.5 billion of common stock. We also had strong deposit growth and while loan demand was weak early in the year, loans grew 5% in the second half with growth in both our consumer and commercial portfolios,” Scharf said.
The fourth-biggest U.S. bank by assets, Wells Fargo Chief Financial Officer Mike Santomassimo said on a call with reporters that the bank is shooting for $3.3 billion in additional cost cuts this year, due to expanded digital use by consumers and a reduced brick-and-mortar presence.
Read more: Analysts Expect Big Banks to Post Record Profits for ’21
“As the economy continued to recover, we saw increased consumer spending, higher investment banking fees, higher asset-based fees in our Wealth and Investment Management business and strong equity gains in our affiliated venture capital and private equity businesses. We continued to manage credit well, and the strong economic environment helped reduce charge-offs to historical lows and our results benefitted from reductions in our allowance for credit losses,” Scharf said.
Headquartered in San Francisco, Wells Fargo shares have jumped 17% this year, exceeding the 11% rise of the KBW Bank Index, according to reports.
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