Net income of Wells Fargo Co (NYSE:WFC). the market leader in mortgage lending and the second-largest U.S. bank by capitalization, rose 4% to $2.99 billion, or 64 cents per share, in the fourth quarter of 2020, up from $2.87 billion, or 60 cents per share, in the same period a year earlier. Analysts polled by FactSet had on average forecast net profit of 59 cents per share.
The bank said in a press release that revenues fell 9.7 percent to $17.93 billion from $19.86 billion in the October-December period a year earlier. This figure was weaker than market expectations. The consensus forecast for this figure was $18.12bn.
The bank's net interest income fell by 17% year on year to $9.28 billion, which was worse than the average expert forecast of $9.35 billion. The fall was primarily due to the negative impact of low interest rates. Net interest margin stood at 2.13 percent, down from 2.53 percent a year earlier.
Non-interest income was $8.65 billion, down slightly from the fourth quarter of 2019.
Bank deposits rose 4% to $1.38 trillion, while outstanding loans fell 6% to $899.7 billion.
Provisions for loan losses fell by $823 million last quarter, mainly due to the release of previously booked funds, the statement said.
The bank's Tier 1 capital adequacy ratio under Basel III was 11.6% at the end of December compared with 11.1% a year earlier.
Wells Fargo shares are down in pre-market trading on Friday. The bank's capitalisation has risen 51.4 per cent to $139.8bn in the past three months.