Wells Fargo’s profit for the fourth quarter came in ahead of Wall Street’s targets, even as the bank had to dole out another $3.3 billion in fines and penalties to help resolve numerous scandals from recent years.
Wells earned $2.9 billion, or 67 cents per share, in the the last quarter of 2022. Analysts were expecting a profit of 60 cents per share. Revenue of $19.66 billion fell short of Wall Street's projections of $20 billion as well as the $20.9 billion logged in the same quarter last year.
Wells said the losses related to the regulatory matters were equal to about 70 cents per share.
The San Francisco-based bank, which until recently was the biggest U.S. mortgage lender, said earlier this week it plans to drastically reduce its mortgage lending business. Wells said it is ending its correspondent lending business and reducing the size of its loan servicing portfolio to focus on its existing customers and expand its reach in underserved communities. Wells also introduced a handful of new credit card products last year and said it plans to roll out more in 2023.
Wells notched $13.4 billion in net interest income in the period, easily topping the $9.3 billion from the same period a year ago.
Wells, like other banks, has benefitted from the Federal Reserve’s aggressive interest rate hikes as the central bank tries to tamp down the highest inflation in four decades. Though there have been signs that inflation is easing, Fed officials have signaled that they may raise the central bank’s main borrowing rate another three-quarters of a point in 2023, which would bring it to a range of 5% to 5.25%.