Wells Fargo beat analysts’ expectations with a slight improvement in revenue to $21.9 billion from $21.8 billion a year ago tied to stronger consumer lending, rising interest rates and other factors. However, net income of $6.0 billion, or $1.13 per share, did not top estimates; these results, though, were up from $4.5 billion, or $0.83 per share, in the third quarter of 2017.
“In the third quarter, we continued to make progress in our efforts to build a better Wells Fargo … We are strengthening how we manage risk and have made enhancements to our risk management framework,” according to CEO Tim Sloan.
In wealth management — which accounts for 12% of the bank’s total net income — profits grew 2% year over year to $732 billion from $719 billion. That’s a big change from last quarter, when net income sank 37% from the prior year and the unit set $114 million aside for refunds to wealth management clients who were charged “incorrect fees.”
The number of financial advisors in the retail brokerage business, though, fell again. It stands at 14,074 — down 490 from a year ago and 152 from the second quarter.
Since Wells Fargo’s fake-accounts scandal began capturing headlines in September 2016, the number of advisors has declined by 1,012 — a drop of 7% from 15,086 two years ago. The trend seems to be continuing into the fourth quarter.
On Thursday, for instance, Steward Partners said that the former Wells Fargo team Coyle Financial Group joined it with some $500 million in client assets in Washington, D.C. (Steward is an independent practice affiliated with Raymond James.)
Total assets under management for Wells Fargo’s Wealth & Investment Management (WIM) unit stand at $1.9 trillion, a gain of 2% from a year earlier thanks to the strong financial markets. But this improvement was “partially offset by net outflows,” the bank says.
The retail-brokerage segment also grew assets by 2% year over year to $1.6 trillion, with advisory assets of $560 billion.
As for WIM referrals to Wells Fargo’s community banking business, these assets were flat from a year ago and dropped 7% from Q2’18, though they are up 1% year to date.
WIM’s Individual Retirement Account assets are $418 billion, up 5% from last year.
— Check out JPMorgan Boosts Loans, Citi Bond Traders Snap Back: Q3 Earnings on ThinkAdvisor.