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WellsFargo on STOCK.COM


Jan 14 2015, 2.27pm GMT


The U.S mortgage lender giant reported slight increase on quarterly profit above expectations.

Image: iStock © RiverNorthPhotography

Earnings Forecast: $1.02 per share - Actual: $1.02

Revenue Forecast: $21.23 billion – Actual: $21.4 billion

Unlike the asset bank JPMorgan, which released below expectation figures today, Wells Fargo depends on mortgages for income and with the growth in the U.S economy, the lender has seen increases in both profit and net interest income in the fourth quarter.

Thomson Reuters analysts listed forecast at earnings of $1.02 per share with revenue of $21.23 billion – actual figures report net income at $5.7 billion, or $1.02 per share, compared with $5.6 billion, or $1.00 per share, on revenue of $21.4 billion for fourth quarter 2013.

Highlights of fourth-quarter report:

  • Net income of $5.7 billion, up 2% from fourth quarter 2013
  • Diluted EPS of $1.02, up 2%
  • Revenue of $21.4 billion, up 4%
  • Total average loans of $849.4 billion, up $36.1 billion, or 4%, from fourth quarter 2013
  • Quarter-end loans of $862.6 billion, up $40.3 billion, or 5%
  • Quarter-end core loans of $801.8 billion, up $60.3 billion, or 8%
  • Total average deposits of $1.1 trillion, up $89.4 billion, or 8%
  • Nonaccrual loans down $2.8 billion, or 18%
  • $250 million reserve release

Highlights of full-year 2014 report:

  • Net income of $23.1 billion, up 5% from 2013
  • Diluted earnings per share (EPS) of $4.10, up 5%
  • Revenue of $84.3 billion, up 1% from 2013 $83.8
  • Pre-tax pre-provision profit (PTPP) of $35.3 billion, up 1%
  • Return on assets (ROA) of 1.45% and return on equity (ROE) of 13.41%
  • Returned $12.5 billion to shareholders through dividends and net share repurchases, up from $7.2 billion in 2013

Chairman and CEO John Stumpf said in the release, “As the U.S. economy continues to build momentum, I'm optimistic that our diversified business model will continue to benefit all of our stakeholders in 2015.” The diversification Stumpf speaks of is in terms of fee generation with 10 fee incomes in the business stream: Total Trust & Investment Fees is the largest at 36%, with other fees obtained through Deposit Service Charges, Insurance, Card fees, other fees, mortgage banking, trading, debt securities, equity investments and noninterest income.

Due to low expectations from analysts, Wells Fargo shares fell on Tuesday’s trading by 1.3%. Share price now stands at 51.62 at opening of trade.

MT4 chart: WellsFargo

WellsFargo on STOCK.com

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