Wells Fargo's Profits Soar, but Not for Wealth Unit

Wells Fargo beat estimates with profits of $4.74 billion in the first quarter, up from $653 million a year earlier.

Its earnings per share were $1.05, topping estimates and beating $0.01 in the year-ago quarter, when it and many other large banks put aside funds over concerns tied to the pandemic.

Total revenues, though, grew just 2% year over year to $18.06 billion.

“Our results for the quarter, which included a $1.6 billion pre-tax reduction in the allowance for credit losses, reflected an improving U.S. economy, continued focus on our strategic priorities, and ongoing support for our customers and our communities,” said CEO Charlie Scharf in a statement.

During the first quarter, the bank moved to sell its Asset Management and Corporate Trust businesses. 

“We are also moving forward with our commitment to simplify the company and focus our resources on our core customers,” Scharf said, adding that the bank is “increasing resources dedicated to initiatives to help drive growth in our core franchises.”

Wealth Unit 

Wells Fargo Advisors posted an 8% year-over-year boost in revenue to $3.54 billion, but also had an 8% drop in net income to $419 million.

Overall, the unit’s financial and wealth advisor headcount dropped by 1,087 (or 8%) from a year ago and 236 (or 2%) from the earlier quarter to 13,277. (The bank had 15,086 registered reps as of Sept. 30, 2016, when it began making headlines for its fake-accounts scandal.)

The unit has $2.06 trillion of client assets, up 28% year over year.

Advisors’ average 12-month fees and commissions stand at $1.06 million, up 16% from a year ago and 5% from the prior quarter.