Total wealth revenues at the wealth arm, which includes the business looking after ultra-HNW individuals and families, rose in the second quarter of this year. Assets took a hit from falling market levels.

Wells Fargo has reported that net income in its wealth management division rose to $603 million in the three months to June 30, rising 30 per cent from the same period a year earlier. 

(The wealth arm includes services to high net worth and ultra-HNW clients, such as the rebranded Abbot Downing business.)

Total revenues at the wealth business rose 5 per cent to $3.705 billion in Q2 2022. Non-interest costs rose 1 per cent year-on-year to $2.911 billion. This segment of Wells Fargo made a $7 million provision for credit losses, narrowing from $37 million in the first quarter and a net release of $24 million a year ago.

Total client assets stood at $1.835 trillion at the end of June, falling 14 per cent from a year ago, reflecting the decline in market levels for much of this year.

Across the whole of the Wells Fargo group, net income almost halved in the second quarter from a year to $3.119 billion from $6.04 billion, the bank said. Total revenue fell to $17.028 billion from $20.27 billion.

“While our net income declined in the second quarter, our underlying results reflected our improving earnings capacity with expenses declining and rising interest rates driving strong net interest income growth. Loan balances increased with growth in both consumer and commercial loans,” chief executive Charlie Scharf said.

"Credit quality remained strong, and we continued to execute on our efficiency initiatives. Noninterest income declined as higher interest rates and weaker financial markets reduced our venture capital, mortgage banking, investment banking, and brokerage advisory results.” 

“Looking ahead, our results should continue to benefit from the rising interest rate environment with growth in net interest income expected to more than offset any further near-term pressure on noninterest income. We do expect credit losses to increase from these incredibly low levels, but we have yet to see any meaningful deterioration in either our consumer or commercial portfolios. Our efficiency initiatives continue to be on track, and the recent Federal Reserve stress test confirmed our strong capital position and our capacity to return excess capital to shareholders through dividends and common stock repurchases,” Scharf added. 

The bank said its Common Equity Tier 1 ratio – a standard international yardstick of a lender’s capital buffer – stood at 10.3 per cent.