In Q3 2019, Wells Fargo saw net income drop 23%, from $6.01bn to $4.61bn, year-on-year.
Revenue increased slightly, from $21.9bn to $22bn year-on-year. However, earnings per share (EPS) were $0.92 compared to $1.13.
Community Banking, which entails consumers and small businesses, witnessed a huge drop in net income. It fell $2.1bn from the previous quarter, and close to $1.8bn year-on-year, to reach $999m. Revenue fared better as it fell 5%, or $566m, from the previous quarter ($577m year-on-year) to $11.2bn.
However, primary consumer checking customers at Wells Fargo grew 1.5% to hit 24.3 million in Q3 2019 from the same point last year. The growth rate would have been 0.4% higher if it wasn’t for the sale of 52 branches and $1.8bn of deposits closed in Q4 2018.
Furthermore, the bank now has 30.2 million digitally active customers, including 24.2 million active on mobile. Wells Fargo ended the last quarter with 30 million active digital banking customers including 23.7 million active mobile banking customers.
Wells Fargo branches total 5,393 at the end of Q3 2019 as there were 130 branch consolidations in the year-to-date.
In your opinion, what presents the biggest operational challenge for FS providers in the COVID-19 crisis?
- Switching to large scale homeworking (51%, 162 Votes)
- Retraining the staff (32%, 102 Votes)
- Changing operating hours of branches and call centres (17%, 54 Votes)
Total Voters: 318
Q3 2019 Wells Fargo statements
Interim chief executive Allen Parker said: “We continued to make progress on our top priorities during the third quarter, and we’re all looking forward to Charlie Scharf’s joining Wells Fargo on October 21 as the company’s chief executive officer and President. It’s been an honour for me to serve as the interim chief executive officer over the past six months, and I want to thank both our management team and all our team members for their hard work during this period of transition. Our continued efforts to transform Wells Fargo and our unwavering commitment to serve our customers resulted during the third quarter in higher branch customer experience survey scores, growth in primary consumer checking customers, and increased loan and deposit balances. We have more work ahead, but I’m confident that our focused efforts and the fundamental strengths of Wells Fargo will continue to enable us to achieve success.”
CFO John Shrewsberry added: “Wells Fargo reported $4.6bn of net income in the third quarter and diluted earnings per share of $0.92, which included the impact of a $1.6bn, or $(0.35) per share, discrete litigation accrual for previously disclosed retail sales practices matters, as well as a $1.1bn, or $0.20 per share, gain from the sale of our Institutional Retirement and Trust business. Business fundamentals were strong as both loans and deposits grew from the second quarter and from a year ago. Our net charge-off rate remained near historic lows, and we had strong capital returns, including increasing our quarterly common stock dividend by 19% and reducing our common shares outstanding by 9% compared with a year ago, while maintaining a strong capital position.”