Wells Fargo & Company’s community banking arm has posted a net income of $3.29bn for the first quarter of 2016, down 7% compared to $3.54bn in the year-ago quarter.
For the quarter ended 31 March 2016, the unit’s total revenue increased 4.1% to $12.61bn from $12.11bn in the prior year.
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The bank said that the rise in the revenue was driven by higher net interest income, mortgage banking fees, deposit service charges, and debit and credit card fees, partially offset by lower market sensitive revenue, mainly gains on equity investments and trading activities, and lower trust and investment fees.
The division’s noninterest expense increased 3.7% to $6.83bn from $6.59bn in the corresponding quarter of 2015, due to rise in operating losses and personnel expenses, partially offset by lower foreclosed assets expense.
The unit’s provision for credit losses rose 9.4% to $720m from $658m a year earlier.
The community banking unit of the US-based 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.
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By GlobalDataIn addition, 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.
Overall, the banking group reported a net income of net income of $5.46bn for the first quarter, a fall of 5.8% from $5.8bn a year ago. Revenue increased 4.2% to $22.2bn from $21.3bn in the first quarter of 2015.
Wells Fargo chairman and CEO John Stumpf said: "Wells Fargo’s first quarter results reflected the benefit of our diversified business model as we managed challenges presented by a volatile operating environment for our industry. We again generated solid growth in the fundamental drivers of long-term value creation: loans, deposits and capital.
"We also completed two important acquisitions from GE Capital, which are great additions to our company and demonstrate the benefit of our strong financial position. We remain focused on meeting the financial needs of our consumer and business customers, and I believe we are well positioned for the future."
