Wells Fargo saw its net income fall close to 90% in the first quarter to $653 million from $5.86 billion a year ago due to the coronavirus pandemic and its resulting fallout.
Earnings per share were just $0.01 in Q1’20 vs. $1.20 in Q1’19; analysts estimated EPS of $0.61 for the period ending March 31. The bank’s revenues declined 18% from last year to $17.7 billion.
Chief Financial Officer John Shrewsberry explained that the bank’s latest results were hurt by “a $3.1 billion reserve build, which reflected the expected impact these unprecedented times could have on our customers” and “an impairment of securities of $950 million driven by economic and market conditions.”
As for the Wealth and Asset Management unit, its financial advisor headcount dropped by 378 year over year and 62 from the prior quarter to 13,450 as of March 31, 2020. (The firm had 15,086 registered reps on Sept. 30, 2016, when it began making headlines for its fake-accounts scandal.)
The unit’s profits fell 20% year over year to $463 million as of March 31; they were up 82% from the earlier period.
Assets weakened 12% from last year to $1.6 trillion on lower market returns and outflows from the Correspondent Clearing business, Wells Fargo said. Referrals from community bank clients, though, rose 16% from last year to $2.8 billion.
JPMorgan Profits Drop 70%
Meanwhile, at JPMorgan, profits and earnings per share dropped nearly 70% from last year to $2.87 billion, or $0.78 a share, in Q1’20; analysts expected the bank to earn $2.49 a share. Revenue, though, declined only 3% to about $29.1 billion.
“The first quarter delivered some unprecedented challenges and required us to focus on what we as a bank could do — outside of our ordinary course of business — to remain strong, resilient and well-positioned to support all of our stakeholders,” said CEO Jamie Dimon, in a statement.
JPMorgan set aside about $6.8 billion as a cushion against expected credit losses, or bad loans.
The number of wealth-management advisors at the bank declined by 1 from a year ago and 12 from the prior period to 2,878.
The broader Asset and Wealth Management unit had a 3% jump in revenue to $3.6 billion with slightly higher net income of $664 million.
Its total assets were $3 trillion as of March 31, up 4% from last year, with $2.2 trillion in assets under management, up 7%.