Wells Fargo & Co. WFC, -2.11% blew past earnings estimates for the second quarter, as it released 1.6 billion from loan loss reserves thanks to a continued economic recovery from the coronavirus pandemic. The San Francisco-based lender posted net income of $6.04 billion, or $1.38 a share, for the quarter, after a loss of $3.846 billion, or $1.01 a share, in the year-earlier quarter. Revenue rose to $20.270 billion from $18.286 billion. The FactSet consensus was for EPS of 98 cents and revenue of $17.757 billion. “Wells Fargo benefited from the continued economic recovery, strong markets that helped drive gains in our affiliated venture capital businesses, and our progress on improving efficiency, but the headwinds of low interest rates and tepid loan demand remained,” Chief Executive Charlie Scharf said in a statement. Net interest income fell 11% to $8.800 billion, below the $8.935 billion FactSet consensus, while noninterest income rose 37% to $11.470 billion, above the $8.847 billion FactSet consensus. In the consumer banking division, home lending rose 40% to 2.072 billion, while credit card lending was up 14% to $1.363 billion. In the corporate and investment bank, revenue fell 18% with markets revenue down 45% on lower trading activity across most asset classes mostly because of market conditions, the bank said. Wealth management revenue rose 10% to $3.536 billion. Following the recent Federal Reserve stress tests, Wells is expecting to raise its third-quarter dividend to 20 cents a share from 10 cents a share, subject to board approval. It plans to repurchase about $18 billion in shares during the four-quarter period starting in the third quarter. Shares were up 0.6% premarket and have gained 43% in the year to date, while the S&P 500 SPX, -0.35% has gained 16%.
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