Thanks to the rate policies of the US Federal Reserve, one of the main banks in that country registered high profits in the third quarter and that impacts the company’s shares.
The third largest bank in the United States, Wells Fargo, earned US$5,767 million in the third quarter of the year, which represents an improvement of 64.5% compared to the result recorded by the entity in the same period of 2022. Meanwhile, the profit was US$15,696 million in the first nine months of 2023, data which reflects a growth of 49% compared to the same period of the previous year. And that is reflected in their actions on Wall Street.
As announced this Friday by the banking group, Its net income between January and September amounted to US$62,119 million, 14.3% more than in the first nine months of 2022. And, in the third quarter alone, it earned 60.6% more than a year before, and its income reached $20,857 million, 6.6% more year-on-year. Meanwhile, Wells Fargo recorded an adverse impact of US$1,197 million in relation to credit risk, which is 53% more than the item intended to provision for credit risk in the same period of 2022.
In this context, its shares rise 2.99% this Friday on the United States Stock Exchange. These occur on a day in which the main banks in the United States, JPMorgan Chase, Wells Fargo and Citigroup are experiencing an increase in their shares of between 3% and 5% in the stock market after surpassing quarterly profit estimates.
Wells Fargo’s good results and what’s coming
The good result responds to increase in interest rates that the Federal Reserve (Fed) has been implementing.
“Our third quarter results were strong,” said Wells Fargo CEO Charlie Scharf, highlighting growth in net interest income driven by higher interest rates, while expenses declined from a year ago. due to lower operating losses.
Going forward, however, he anticipated that, “while the economy has remained resilient, we are seeing the impact of the slowdown with loan balances declining and charge-offs continuing to deteriorate modestly.”
Source: Ambito
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