Trade The News story
Reports Q2 -$0.66 v -$0.07e, Rev $17.8B v $18.4Be; confirms dividend cut to $0.10/shr from $0.51/shr
- ROA -0.49% v 1.31% y/y
- ROE -6.63% v 13.26% y/y
- Net interest margin 2.25% v 2.82% y/y
- Tier 1 common equity ratio under Basel III 10.9% v 10.7% q/q
- Nonperforming assets $7.8B v $6.4B q/q
- Net charge offs % of avg loans 0.46% v 0.28% y/y
- Allowance for credit losses as 0.46% of total loans % v % y/y
- Provision for credit losses $9.5B v $500M y/y
- Efficiency ratio 81.6% v 73.6% q/q
- Residential mortgage origination's $57B v $48B q/q
- Total Avg loans $971B v $965B q/q, +3% q/q, -7% y/y
- CFO: In addition to the higher reserve, net interest income declined linked quarter primarily due to the impact of significantly lower market interest rates. Our second quarter results also included $1.2 billion of operating losses, primarily due to customer remediation accruals. Additionally,we had higher personnel and occupancy expense due to COVID-19. With respect to the balance sheet, loans declined as commercial customers paid down loans that were drawn late in the first quarter during the market turbulence at the outset of the pandemic, while consumer deposit balances increased reflecting unprecedented government stimulus programs, lower spending, and customers’ preferences for liquidity.
Provisions for credit losses and allowance for credit losses rose driven by current and forecasted economic conditions due to the COVID-19 pandemic
*Reminder: 06/10 WFC CFO: Guides FY20 Net interest income down >11% y/y (had withdrawn NII outlook on 04/14) - Morgan Stanley conf comments
16:35:07 - 06/29 WFC To reduce Q3 quarterly dividend from current $0.51/sh level
- ROE -6.63% v 13.26% y/y
- Net interest margin 2.25% v 2.82% y/y
- Tier 1 common equity ratio under Basel III 10.9% v 10.7% q/q
- Nonperforming assets $7.8B v $6.4B q/q
- Net charge offs % of avg loans 0.46% v 0.28% y/y
- Allowance for credit losses as 0.46% of total loans % v % y/y
- Provision for credit losses $9.5B v $500M y/y
- Efficiency ratio 81.6% v 73.6% q/q
- Residential mortgage origination's $57B v $48B q/q
- Total Avg loans $971B v $965B q/q, +3% q/q, -7% y/y
- CFO: In addition to the higher reserve, net interest income declined linked quarter primarily due to the impact of significantly lower market interest rates. Our second quarter results also included $1.2 billion of operating losses, primarily due to customer remediation accruals. Additionally,we had higher personnel and occupancy expense due to COVID-19. With respect to the balance sheet, loans declined as commercial customers paid down loans that were drawn late in the first quarter during the market turbulence at the outset of the pandemic, while consumer deposit balances increased reflecting unprecedented government stimulus programs, lower spending, and customers’ preferences for liquidity.
Provisions for credit losses and allowance for credit losses rose driven by current and forecasted economic conditions due to the COVID-19 pandemic
*Reminder: 06/10 WFC CFO: Guides FY20 Net interest income down >11% y/y (had withdrawn NII outlook on 04/14) - Morgan Stanley conf comments
16:35:07 - 06/29 WFC To reduce Q3 quarterly dividend from current $0.51/sh level