By - Mridul Gogoi
- Wells Fargo (NYSE: WFC) reported total revenue of US$17.028 billion for Q2, FY-22.
- Wells Fargo’s net income for the second quarter of fiscal 2022 was US$3.1 billion.
- Fed’s rate hike benefitted Wells Fargo with increased lending rates.
Leading financial services company Wells Fargo & Company (NYSE: WFC) on Friday reported a net income of US$3.1 billion for the second quarter of FY-22.
Fed Reserve’s ongoing rate hikes helped the company to widen its lending margins.
WFC’s total revenue for the reported quarter was US$17.028 billion (17,028 million) compared to US$20.20 billion (20,270 million) in the year-ago quarter.
Wells Fargo & Co. CEO Charlie Scharf said that although the bank’s net income plunged in the second quarter, the results portray its improved earning capacity with shrinking expenses and growing interest rates driving strong net interest income growth.
He also said that loan balances grew with growth in both consumer and commercial loans.
The San Francisco-based company said on Friday that its net interest income revenue from customer loans jumped 16% to US$10.2 billion. The figure also matched what the analysts predicted.
Wells Fargo’s net interest margin stretched to 2.39% from 2.02% a year earlier.
After suffering losses during years of historically low borrowing costs, shares of Wells Fargo & Co. saw a boom propelled by the Federal Reserve’s interest-rate hike.
Compared to the second quarter of 2021, Wells Fargo’s noninterest income decreased by 40% because of the lower results in their affiliated venture capital and private equity. Market conditions, a decline in mortgage lending, etc., are a couple of reasons for this decline, the bank mentioned.
WFC mortgage-banking income skid 79% to US$287 million in the second quarter, missing analysts’ estimate of US$392.4 million.
On the other hand, WFC’s noninterest expense decreased by 3% compared to the same quarter last year.
Shares of Wells Fargo jumped 5.8% to US$40.98 at 10:12 a.m. Its stock had fallen 19% in 2022 through Thursday.