Financial Results

Net Income Slips At Wells Fargo, Wealth Unit

Editorial Staff April 15, 2024

Net Income Slips At Wells Fargo, Wealth Unit

One negative force at work was clients moving cash into higher-yielding deposits, denting net interest income.

Wells Fargo late last week reported net income of $4.619 billion for the first three months of 2024, falling 7 per cent year-on-year. Noninterest income fell by 8 per cent to $12.2 billion, while noninterest income rose by 17 per cent to $8.64 billion.

Noninterest costs rose by 5 per cent to $14.34 billion; provision for credit losses narrowed to $938 million in the three months to March 31, down 22 per cent. At the end of March, the San Francisco-headquartered lender said it had an efficiency ratio of 69 per cent, up from 66 per cent a year before. Its return on equity dipped to 10.5 per cent from 11.7 per cent.

At the end of March, the bank had a Common Equity Tier 1 ratio – a standard international measure of a bank’s “shock absorber” – of 11.2 per cent, up from 10.8 per cent a year before.

Wealth management
Within Wells Fargo’s wealth management results, which include its private banking arm and advisors to ultra-high net worth individuals, it reported a 17 per cent year-on-year drop in net income, coming in at $381 million; total revenue rose 2 per cent; noninterest costs rose 6 per cent. Provision for credit losses fell. Total client assets rose 13 per cent from a year earlier to $2.186 trillion, the bank said. 

Noninterest income rose 9 per cent, benefiting from higher asset-based fees. Wells Fargo said its fall in net interest income was caused by lower deposit balances because clients moved cash into higher-yielding alternatives.

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