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Wells Fargo 3Q numbers

Yesterday we had numbers out of the US's biggest bank by mortgage assets, Wells Fargo. As far as banks go this is one of the most boring out there, no big line items for fines, lawyer costs and trading loses. The result is the company chugs along, growing revenue and profits one quarter at a time.

Here are the numbers: Revenue of $21.8 billion up from $21.21 billion, profit up 1.2% to $1.05 a share or $5.8 billion, loans up 7.7% (YoY) to $903 billion, deposits up 6% (YoY) to $1.2 Trillion.

Some of the numbers beat expectations where others missed, the end result, shares basically flat for the day. Going back to August though the shares are down around 10% since then. Why? August was when people started talking about rates possibly not rising this year and the banking sector had been bought up in anticipation of a rates rise leading to higher profits for the banks.

The one negative aspect in the numbers was the increasing concern about loans extended to the energy sector, which in Wells Fargo's case it is only 2% of their loan book. Wells Fargo has increased their provisions for possible bad loans to the sector, you would rather have the cover set aside than be in a situation where you need more cover than expected. This is still a stock that we are adding to, given it's size it won't shoot the lights out but will steadily grow as the US continues to get bigger.


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