Wells Fargo records surprise quarterly profit

[NEW YORK] Wells Fargo & Co reported a surprise quarterly profit on Friday, as stabilising credit costs helped offset the hit from low-interest rates meant to prop up the ailing economy during the Covid-19 pandemic.

The San Francisco-based bank reported net income of US$2.99 billion, or 64 US cents per share, for the quarter ended Dec 31, compared with US$2.87 billion, or 60 US cents per share a year earlier.

Analysts had expected a profit of 60 US cents per share on average, according to the IBES estimate from Refinitiv.

Costs associated with bad loans decreased US$823 million compared to last year and remained far below the level seen in the first half of the year when the bank racked up more than US$14 billion in provision expenses.

Other costs remained elevated at the bank, which has been in the regulators' penalty box since 2016. Rising costs do not help as the banking industry deals with near-zero interest rates and slower loan growth.

REUTERS