Wells Fargo Earnings Reflect Pandemic and 'Legacy Issues'

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Wells Fargo  (WFC) - Get Wells Fargo & Company Report posted better-than-expected fourth-quarter earnings but a revenue miss as the bank continued to navigate the economic impact of the pandemic as well as what CEO Charlie Sharf referred to as "substantial legacy issues."

Wells Fargo posted net income of $2.99 billion, or 64 cents a share, for the fourth quarter, vs. $2.87 billion, or 60 cents a share, in the comparable year-earlier period. Analysts polled by FactSet had been looking for earnings of 58 cents a share.

Revenue was $17.93 billion, down from $19.86 billion in the fourth quarter of 2019. Analysts polled by FactSet had been expecting revenue of $19.347 billion.

A drop in consumer and business lending due to the Covid-19 pandemic and corresponding economic downturn was partially offset by an increase in home lending, the bank said.

Consumer and small business banking slipped 8% to $4.70 billion from $5.1 billion, while home lending rose 2% to almost $2 billion from $1.96 billion. 

“Although our financial performance improved and we earned $3 billion in the fourth quarter, our results continued to be impacted by the unprecedented operating environment and the required work to put our substantial legacy issues behind us,” CEO Charlie Scharf said in a statement.

Wells Fargo in February 2020 agreed to pay $3 billion to settle criminal charges and a civil action stemming from its widespread mistreatment of customers in its community bank over a 14-year period.

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