Wells Fargo & Co. posted revenue for its third quarter that topped Wall Street expectations as the bank revamps operations for today’s digital banking age. However, it came up short on its profit forecasts.
Revenue ended the quarter at $21.9 billion which just beat a $21.89 billion forecast by analysts. Earnings per share reached $1.16 during the quarter. Analysts were expecting earnings of $1.17 per share.
CEO of Wells Fargo Tim Sloan said the results reflect the bank’s transformational changes being made.
Share at Wells Fargo were up 1.3% on Friday.
The bank’s net income ended at $6 billion for the quarter which was an increase of 33% over the same period last year.
Wells Fargo has worked on cutting its costs. Last month, the company announced its plans to cut 5% to 10% of its overall workforce during the next three years. This is part of the company’s ongoing plan to turn the bank around. Wells Fargo currently employs over 265,000 people worldwide.
It said that the changing behavior of consumers including a preference to self-service digital options is why jobs will be lost.
Executives during a conference call on Friday with analysts said the bank is on target to meet goals for reduction of expenses.
One of the largest lenders in the country, Wells Fargo has operations that span across the U.S. although it will close branches in several areas.
The bank said it experienced positive trends for the business during the third quarter and CFO John Shrewsberry said the trends included a growth in consumer checking customers, more usage of credit and debit cards, and an increase in loan originations year over year for small business, auto, personal loans and home equity lines.
Primary checking accounts were up 1.7% from the same period one year ago. However, mortgage activity fell as the bank’s loan apps and originations were down from the previous quarter.
Car loan originations were up 10% from the same quarter last year, and loans for small business rose by 28%.
Wells Fargo said that net interest margin was up to a current 2.94% from the second quarter ending 2.93%.
With the rates of interest rising, banks could see more earnings on lending; Net interest income during the quarter was up 9% from the same period one year ago.