Wells Fargo beats profit estimates on reserve release boost
(Reuters) – Wells Fargo & Co swung to a profit in the second quarter, the bank said on Wednesday, as it released funds set aside to cover soured loans, while costs tied to its years-old sales practices scandal stabilized.
Wells Fargo has been operating under penalties from regulators since 2016 when details of a sales scandal emerged and led to the departure of two chief executives and billions of dollars in litigation and remediation costs.
Under an order imposed by the Federal Reserve in 2018, the bank is not allowed to let its assets rise above $1.95 trillion.
Wells Fargo, however, began to rein in costs this year, signaling that it may finally be emerging from the episode that has dogged it for nearly five years.
The fourth-largest U.S. lender reported a profit of $6 billion, or $1.38 per share, compared with a net loss of $3.85 billion, or $1.01 per share, a year earlier.
Analysts on average had expected a profit of 95 cents per share, according to estimates from Refinitiv.
Total revenue rose 11% to $20.27 billion
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