Lede

Wells Fargo reported a surge in profits in Q1 2023, thanks to higher interest rates, despite building up loan loss reserves.

Summary

• Net income increased by more than 30% to nearly $5 billion in Q1 from a year ago.
• Net interest income, what it makes lending money minus what it pays out to customers, increased 45% on the back of soaring interest rates.
• Wells Fargo set aside $1.2 billion for credit losses after reducing its provisions by $787 million a year ago.
• Noninterest income decreased 13% in the quarter, driven by lower results in its affiliated venture capital and private equity businesses as well as a decline in mortgage banking income.
• The bank recently laid off hundreds of mortgage bankers as part of a sweeping round of cuts triggered by the bank’s recent strategic shift.
• The bank resumed its share repurchase program during the quarter, buying bank 86.4 million shares, or $4.0 billion, of common stock.
• The stock is up more than 3% in premarket trading after the earnings report and up 6% in April, trimming its 2023 losses to about 4%.