The wealth arm of the US banking group logged stronger net income in Q1.

Wells Fargo’s wealth and investment management arm, which includes units such as its Abbot Downing group, reported net income of $714 million in the first three months of this year, rising 6 per cent from the fourth quarter of last year 2017 and up from $665 million a year ago.

The California-headquartered banking group said WIM revenue of $4.2 billion decreased $91 million, or 2 percent, from the prior quarter, primarily due to lower gains on deferred compensation plan investments (offset in employee benefits expense), lower net interest income, and lower transaction revenue, partially offset by higher asset-based fees. 

Noninterest expense increased $44 million, or 1 per cent, from the prior quarter, primarily driven by seasonally higher personnel expenses, partially offset by lower non-personnel expense and lower deferred compensation plan expense (offset in gains on equity securities), Wells Fargo said.

WIM total client assets were $1.9 trillion, up 4 per cent from a year ago, driven by higher market valuations. Within wealth management, client assets were $242 billion, up 2 per cent from the prior year, Wells Fargo said in a statement last Friday.

For the banking group as a whole, it logged preliminary net income of $5.9 billion, compared with $5.6 billion in first quarter 2017; diluted earnings per share rose to $1.12 from $1.03.

Wells Fargo said its results may be revised because of ongoing compliance resolution issues involving US authorities.

“I’m confident that our outstanding team will continue to transform Wells Fargo into a better, stronger company; however, we recognize that it will take time to put all of our challenges behind us. During the first quarter our team members continued to focus on our vision of satisfying our customers’ financial needs and helping them succeed financially. We also made progress on our priority of rebuilding trust with our customers, team members, communities, regulators, and shareholders,” Tim Sloan, chief executive, said in a statement. 

US authorities, including several attorney’s offices, federal and state regulators, have been probing Wells Fargo since late 2016 when the bank disclosed widespread issues surrounding sales practices. Employees had opened as many as 3.5 million accounts without clients’ knowledge.