Wells Fargo & Company's community banking arm has reported net income of $3.18bn, down 1% from $3.21bn in the year-ago quarter.
For the quarter ended 30 June 2016, the unit's total revenue stood at $12.2bn, a rise of 2% from $11.9bn in the prior year. The bank said that the rise in the revenue was driven by higher gains on sale of debt securities, other income (hedge ineffectiveness), net interest income and card fees, partially offset by lower mortgage banking revenue, gains on equity investments, as well as trust and investment fees.
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The unit’s noninterest expense dropped 1% to $6.65bn from $6.72bn a year earlier. The decline was driven by lower operating losses and foreclosed assets expense, partially offset by higher personnel cost, the US-based lender said.
The division's provision for credit losses increased to $689m from $397m in the second quarter of 2015.
The community banking unit of the bank offers diversified financial products and services for consumers and small businesses such as checking and savings accounts, credit and debit cards, and auto, student, as well as small business lending.
The unit also offers investment, insurance and trust services in 39 states and D.C., alongside mortgage and home equity loans in all 50 states and D.C. through its Regional Banking and Wells Fargo Home Lending business units.
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By GlobalDataOverall, the banking group posted a net income of $5.6bn for the second quarter of 2016, compared with $5.7bn in the second quarter 2015.
Wells Fargo chairman and CEO John Stumpf said: “Wells Fargo's second quarter results demonstrated our ability to generate consistent performance during periods of economic, capital markets and interest rate uncertainty. Compared with a year ago, we had solid growth in loans, deposits and customers, which are our fundamental drivers of long-term value.
“We also improved our efficiency ratio while continuing to reinvest in the franchise. We returned more capital to our shareholders in the quarter and were pleased to have received a non-objection to our 2016 Capital Plan from the Federal Reserve. We remain well positioned to continue to meet the financial needs of our customers.”
