Wells Fargo Q2 2019 results beat analyst forecasts boosted by successful cost cutting and a rise in non interest income.
Net income of $6.2bn for the quarter to end June is up 20% from $5.2bn for the year ago quarter.
Non-interest income rises by 5.3% from the year ago quarter.
Second quarter non-interest income includes higher trust and investment fees and services charges on deposit accounts and higher card fees.
On the other hand, net interest income is down by 3.5% to $12.1bn.
The decline is driven by balance sheet mix and repricing, including the impacts of higher deposit costs. Margin pressure results in a 9 basis point drop in Wells Fargo’s net interest margin for the quarter to 2.82%.
Other highlights include a slight fall in provision for credit losses. This is primarily due to credit improvement in the automobile and consumer real estate portfolios.
Wells Fargo Q2 2019 other retail banking highlights:
- Primary consumer current account customers increase by 1.3% from a year ago to 24.3 million from 23.9 million;
- Branch customer experience surveys completed during second quarter 2019 reflect higher scores from the previous quarter. In particular, ‘Customer Loyalty’ and ‘Overall Satisfaction with Most Recent Visit’ scores reach their highest level for over three years;
- Debit card point-of-sale purchase volumes rise by 6% y-o-y;
- Wells Fargo branch rightsizing continues. The bank now has 5,442 branches, compared with 5,751 at the end of the second quarter last year.
Despite closing over 300 branches since the start of 2018, Wells Fargo remains the largest US bank ranked by branches. The bank’s branch network peaked at 6,795 outlets in 2009 following its acquisition of the failed Wachovia.
Wells Fargo ends the quarter with 30 million active digital banking customers including 23.7 million active mobile banking customers. A year ago the respective numbers were 28.9 million and 22 million.