Wells Fargo Q119 results top analyst forecasts boosted by consumer lending strength with net income rising by 14% to $5.86bn.
The results highlight a continued strong credit performance and high levels of liquidity. On the other hand, less positive metrics include a 3 basis points drop in the net interest margin to 2.91%.
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Other less than positive metrics includes a cost-income ratio of 64.4% up from 63.6% in the prior quarter.
In addition, retail banking revenue declined by 1%, predominantly due to lower mortgage banking income.
Credit card transactions are up 5% year-on-year with debit card purchases up by 6%. Auto loans are ahead by 24% y-o-y.
Chief Financial Officer John Shrewsberry says, “Our continued de-risking and consistent level of profitability have resulted in capital levels well above our regulatory minimum. As a result, we returned $6.0bn to shareholders up 49% from a year ago.
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By GlobalData“Returning excess capital to shareholders remains a priority. We remain committed to, and are on track to achieving, our 2019 expense target.”
Wells Fargo Q119 results: retail banking highlights
- Primary consumer checking customers of 23.9 million is up 1.1% from a year ago;
- Customer Loyalty and Overall Satisfaction with Most Recent Visit reach their highest level in more than three years;
- 8 million active digital (online and mobile) customers up from 28.8 million a year ago;
- Active mobile banking customers rise by 1.5 million from a year ago to 23.3 million, and
- Small business lending originations rise by 6% y-o-y.
In the past year Wells Fargo’s active general purpose credit card accounts are down by 2% to 7.8 million.
Wells Fargo ends the first quarter with 5,479 branches. It has closed 5.6% of its branch network or a net reduction of 326 outlets in the past year.
In wealth management, client assets are down by 4% to $232bn, driven primarily by net outflows.
