The Federal Reserve has signaled it is unlikely to raise interest rates in 2019 given risks to the USA economy from a global slowdown, which investors have feared could pressure net interest income, or the difference between what a bank earns on loans and pays on deposits.
Non-interest expense fell 7.3 per cent to US$13.9 billion as the bank made progress on an initiative started by former Chief Executive Officer Tim Sloan and avoided any big legal charges. During Sloan's tenure, Wells Fargo discovered problems in more business lines, subjecting the bank to more than a dozen probes by USA agencies and a growth ban from the Federal Reserve.
Revenue in its three main businesses of consumer banking, banking for companies and wealth management all fell compared to the same period previous year.
Average deposits fell by 3% to Dollars 1.3 Trillion.
The top- and bottom-line numbers are not expected to be strong, given the deficits Wells Fargo has had to work with over the year. The fallout resulted in CEO John Stumpf's ouster, with Sloan taking his place. Griffin Asset Management Inc.'s holdings in Wells Fargo & Co were worth $10,450,000 as of its most recent filing with the SEC. The board is searching for a new leader outside the bank. Allen Parker, Wells Fargo's general counsel, is running the bank in the meantime. Analysts projected earnings of Dollars 1.09 per share on revenue of USD 21.01 Billion for the quarter. On average, equities research analysts forecast that Wells Fargo & Co will post 4.93 earnings per share for the current year. The bank's efficiency ratio was also 64.4% for the quarter, also above estimates.
Since then, the company has settled several lawsuits totaling billions of dollars, including a $575 million settlement with 50 states and the District of Columbia over the phony accounts. Likewise, how Wells Fargo guides for all of fiscal 2019 will give analysts a hint of how confident the bank is in terms of getting back to growth. National Pension Service now owns 3,989,928 shares of the financial services provider's stock worth $209,711,000 after buying an additional 12,963 shares in the last quarter. Fees from mortgage banking, a bread-and-butter product for Wells Fargo, fell 24% to $708 million in the first quarter from $934 million a year earlier.