Wells Fargo & Co reported this Thursday a drop of almost 21% in its profits in the first quarter, since the rise in inflation and interest rates, as well as concern about the economic impact of the war in ukrainemade a dent in their main businesses.
The impact of pandemic, lower than expected, has also led banks to release the reserves set up to cover losses. Wells Fargo reduced its provision for credit losses by $1.1 billion in the first quarter.
“Our internal indicators continue to point to the strength of the financial position of our clients, but the Federal Reserve has made it clear that it will take the necessary measures to reduce inflation and this will undoubtedly reduce economic growth,” said the CEO, Charlie Scharf.
In addition, the war in Ukraine adds additional downside risk,” Scharf said.
America’s fourth-largest lender posted a profit of $3.67 billion, or 88 cents a share, in the three months ended March 31, up from $4.64 billion, or $1.02 a share, a year earlier. .
Analysts expected, on average, that the bank made a profit of 80 cents per shareaccording to Refinitiv data.
Total revenue fell 5% to $17.59 billion, compared to estimates of $17.8 billion.
