Wells Fargo earnings marred by US$2B regulatory charge - BNN Bloomberg

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Wells Fargo set aside an additional US$2 billion to resolve a variety of legacy regulatory and legal woes as CEO Charlie Scharf continues wrestling with the costly fallout from scandals he was hired to resolve.

The charge hampered a third quarter that was better than expected on some metrics. Net interest income, for example, rose 36 per cent to US$12.1 billion in the three months ended Sept. 30, the San Francisco-based bank said Friday in a statement. That’s the most since 2019 and better than the 31 per cent average estimate of analysts surveyed by Bloomberg.

The results, and those also reported Friday by JPMorgan Chase & Co., provide early evidence that US lenders are getting a big boost from higher interest rates. Net interest margin -- the difference between what banks earn on loans and what they pay for deposits -- expanded to 2.83 per cent at Wells Fargo, up from 2.39 per cent in the preceding quarter.

Investors also are looking for more economic insights from industry executives heading into year-end. In one signal of continued caution, Wells Fargo set aside US$784 million in provisions for potential credit losses, more than the US$611 million analysts had expected.

 

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