Wells Fargo beats, warns on oil

Wells Fargo just reported first-quarter earnings that beat expectations.

The firm reported diluted earnings per share of $0.99 on revenue of $22.2 billion.

Analysts were expecting adjusted earnings per share of $0.97 on revenue of $21.61 billion, according to Bloomberg.

“Wells Fargo’s first quarter results reflected the benefit of our diversified business model as we managed challenges presented by a volatile operating environment for our industry,” said CEO John Stumpf in a statement.

“We again generated solid growth in the fundamental drivers of long-term value creation: loans, deposits and capital.”

Notably, the firm increased its provision for credit losses to $1.09 billion from $608 million a year earlier. It said its oil and gas portfolio remains under significant stress due to low prices and excess leverage in the industry.

Net interest income was hurt by a $1.2 billion settlement the bank paid related to its mortgage-lending practices between 2001 and 2008.

In the same quarter last year, Wells Fargo reported diluted earnings per share of $1.04 on revenue of $21.3 billion.

Last quarter, Wells Fargo reported diluted earnings per share of $1.03 (versus $1.02 expected) on revenue of $21.6 billion ($21.84 billion expected).

The first quarter is typically the strongest for investment banks, but analysts are expecting an unusually weak Q1 earnings season on Wall Street this year.

Choppy trading conditions in early 2016, fears over China’s growth, and a collapsed oil price are thought to have created a
“perfect storm”
for banks. More on that here.

JPMorgan on Wednesday reported first-quarter earnings that beat on the top and bottom lines. Bank of America reported fourth-quarter earlier on Thursday that were in line with expectations.

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