Earnings

Wells Fargo’s Q3 Beats On Revenues, Falls Short On Earnings

Wells Fargo

As Wells Fargo seeks to cut costs while retooling its business for the age of digital banking, the company reported slightly better than expected revenues, but missed analysts’ earnings expectations for the third quarter. The bank reported revenues of $21.9 billion and earnings per share of $1.16 compared to analyst estimates of $21.89 billion and $1.17, respectively, CNBC reported.

At the same time, Wells Fargo CFO John Shrewsberry noted that the bank is seeing growth in credit and debit card usage, consumer checking and loan originations for small business and auto, among other products. In particular, small business loan originations jumped 28 percent, while car loan organizations were up by 10 percent.

Wells Fargo officials also noted that total loans were down $4.6 billion from the second quarter to $939.5 billion, including a drop in commercial loans of $1.2 billion. This was mainly due to a $2.8 billion decline in commercial real estate loans and partially offset by $1.5 billion in industrial and commercial loan growth. The bank also shared that consumer loans fell $746 million from the second quarter, noting a $1.6 billion decline in auto loans due to expected continued runoff.

In terms of cost cutting, the bank said in September that it intended to reduce its 265,000-strong workforce by 5 to 10 percent. And bank executives said on the call that the company’s cost-cutting goals were “on target.”

The San Francisco-based bank had a total of 5,663 retail branches by the end of the third quarter, citing 207 branch consolidations during the first nine months of the year. Wells Fargo also said it plans to complete the previously announced divestiture of 52 branches in Indiana, Ohio, Michigan and parts of Wisconsin in the fourth quarter.

At the same time, Wells Fargo reported 29 million active digital customers, which include both mobile and online users. In addition, the bank counted 22.5 million mobile active users, a slight gain from 22 million in the second quarter of 2018.

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