Shares of banking giant Wells Fargo & Co. (WFC, Financial) fell after it reported fourth-quarter and full-year 2020 results before the opening bell on Friday.
The San Francisco-based company posted earnings of 64 cents per share for the three months ended Dec. 31, topping Refinitiv's estimate of 60 cents by a slim margin. Wells Fargo noted its earnings were affected by a $781 million restructuring charge, a reserve release of $757 million due to the sale of its student loan portfolio and a $321 million hit due to the "impact of customer remediation accruals."
The bank's revenue declined from the prior-year quarter to $17.93 billion, falling short of the $18.13 billion analysts were anticipating. Net interest income of $9.27 billion also failed to beat expectations of $9.34 billion.
For the full year, Wells Fargo recorded earnings of 41 cents per share on $72.3 billion in revenue, both of which were down from 2019.
In a statement, CEO Charlie Scharf commented on the bank's performance.
"Although our financial performance improved and we earned $3.0 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," he said. "Our agenda is clear and we are making progress."
Revenue for the consumer banking and lending division declined 5% year over year to $8.61 billion, while commercial banking saw sales drop 18% to $2.9 billion and the corporate and investment banking business recorded a 7% decrease to $3.11 billion. Fixed-income trading revenue was flat from the year-ago quarter.
Looking ahead, Scharf said Wells Fargo has "prioritized" and is "moving forward" with its risk and control buildout.
"With a more consistent broad-based recovery and as we continue to press forward with our agenda, we expect you will see that this franchise is capable of much more," he added.
With a $134.03 billion market cap, shares of Wells Fargo were down 6.56% on Friday morning at $32.47. GuruFocus estimates the stock fell over 40% in 2020.
Disclosure: No position.
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