Wells Fargo missed analysts’ earnings estimates as home lending slowed and the bank set aside more than expected for potentially soured loans.
Wells Fargo & Co. missed analysts’ earnings estimates as home lending slowed and the bank set aside more than expected for potentially soured loans as the Federal Reserve’s rate hikes started to cool the once-hot housing market.
“The Federal Reserve has made it clear that it will take actions necessary to reduce inflation, and this will certainly reduce economic growth,” Chief Executive Officer Charlie Scharf said in the statement. “In addition, the war in Ukraine adds additional risk to the downside.” Shares of San Francisco-based Wells Fargo, which fell 19 per cent this year through Thursday, dropped 3.4 per cent to US$37.42 at 6.54 a.m. in early trading in New York.
Net interest income rose to US$10.2 billion, matching what analysts were expecting. The 16 per cent increase demonstrates the boost banks are already getting from the Fed’s rate hikes.
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