Diversification was a popular buzzword from CEOs of two of the four largest U.S. banking companies when reporting on fourth-quarter earnings. While it didn’t gain the same media attention, including the criticism, as its larger competition — JPMorgan and Chase — Wells Fargo posted strong Q4 results, beating Wall Street’s expectations.
“As the U.S. economy continues to build momentum, I’m optimistic that our diversified business model will continue to benefit all of our stakeholders in 2015,” said Wells Fargo CEO John Stumpf.
While the results were slightly different between the banking leader’s response to their earnings, JPMorgan CEO Jamie Dimon also spoke about how the diversification of his company is what gives it strength and values for its shareholders. JPMorgan faced its share of criticism in the press as it missed expectations slightly, but Wells Fargo was able to focus on positive results, overall.
“Our performance in the fourth quarter was a great example of the benefit of our diversified business model and reflected a continuation of the solid results we generated all year,” CFO John Shrewsberry said. “Compared with the prior quarter, we increased deposits and grew commercial and consumer loans while maintaining our risk and pricing discipline.”
Overall, Wells Fargo posted a net income of $23.1 billion in 2014, up 5 percent, year over year. The bank posted revenue of $21.4 billion, which was above Wall Street’s prediction of $21.23 billion — or a 4 percent increase from last year’s fourth quarter. Revenue for the year was $84.3 billion, up 1 percent from 2013. For fourth-quarter results, net income hit $5.7 billion, up 2 percent, year over year. Revenue for the quarter was $21.4 billion, up 4 percent from last year’s fourth quarter.
In terms of online and mobile banking, Wells Fargo reported it has hit 24.8 million active online customers, up 8 percent year-over-year. The company now has 14.1 million active mobile customers, up 19 percent year-over-year. Credit card penetration in retail banking households rose to 41.5 percent, up from 37 percent percent the year prior.
Looking ahead, Stumpf provided a positive outlook for the year ahead, but recognized that the company may be in store for challenges, just as analysts also suspect.
“We are not saying we are off to the races, but we are a bit more optimistic in 2015 than we were at this time in 2014,” Stumpf said.