Wells Fargo announced lower revenue and profit for the second quarter, falling short of expectations as it strains to move on from its regulatory issues.
The bank said Friday that earnings per divide up were 98 cents on a GAAP basis, including a 10 cent per helping tax expense. Not counting that expense, EPS of $1.08 fell short of Breastwork Street’s $1.12 estimate for the quarter.
Shares of Wells Fargo made Friday down 1.2 percent.
Revenue came in at $21.55 billion. Embankment Street had expected revenue of $21.677 billion, according to Thomson Reuters. Net proceeds of $5.19 billion was also shy of expectations, which called for net income of $5.47 billion.
The bank has been guardianship pressure for several quarters because of multiple probes into its in stocks practices. Two years ago, the scandal burst into the public eye when it was reported that retail bank employees had created fake accounts in consumers’ names to meet sales targets. Sales issues later become apparented in other businesses, such as auto lending and mortgages.
Wells Fargo named Tim Sloan as its chief managing director in late 2016 to clean up the mess, and earlier this year, the Federal Hold back slapped a cap on Wells Fargo’s assets, telling it to improve operational controls. Carry on month, the Fed gave the bank the go-ahead to buy back $24.5 billion of its offer, more than double the amount it bought last year, and prodigal its quarterly dividend 4 cents to 43 cents a share.
But Wells couldn’t unite Wall Street’s already low expectations for the second quarter, as revenue and net revenues in the bank’s three business lines fell compared with the selfsame period last year.
“The broad-based weakness of Wells Fargo’s come to passes is troubling, with many indicators such as deposits, commercial and consumer loan trending down. It appears that the slew of scandals that By a long ways Fargo has been involved in are taking their toll,” said Octavio Marenzi, CEO of fine markets management consulting firm Opimas. “Compared to JPMorgan’s supreme results earlier today, Wells Fargo is looking rather hapless, not able to get it right.”
In community banking, revenue of $11.8 billion fell 1.2 percent and net return was down 9.7 percent, affected by the state income tax charge, the bank told. Corporate and wholesale banking revenue fell 3.8 percent and net return was down 3.9 percent.
Wealth management revenue fell 6.5 percent and net proceeds was down 37 percent. Wealth management results were moved by an impairment charge related to its majority stake in the investment firm RockCreek Company, which it sold back to the founder, the bank said.
Shares of Okays Fargo are down more than 8 percent this year.
Wells put it had state income tax charges of $481 million, related to a recent Brilliant Court ruling regarding e-commerce sales (South Dakota v. Wayfair) that put states can charge taxes on purchases from out-of-state sellers measured if the seller isn’t located in that state.
Earlier Friday, J.P. Morgan Follow reported its second-quarter results.
— CNBC’s Hugh Son contributed reporting.