Boston, MA 07/11/2014 (wallstreetpr) – Wells Fargo & Co (NYSE:WFC), the most valuable bank in the world, reported an increase in 2Q profit amid heightened cost-cutting in the company.
Although profit is up in 2Q, the bank failed to extend its record of 17consecutive quarters of profit increase.
Earnings meet expectation
Wells Fargo & Co (NYSE:WFC) reported 3.8 percent increase in profit in a year-over-year basis to $5.73 billion or $1.01 per share. That compared with a profit of $5.52 billion or $0.98 per share in the same quarter a year ago.
The average estimate of 31 analysts was earnings per share of $1.01 for the quarter.
The latest quarter marked the first time since 2009 that Wells Fargo & Co (NYSE:WFC) failed to realize sequential rise in profits.
Ahead of peers
With its 2Q report out, Wells Fargo & Co (NYSE:WFC) becomes the first of the largest U.S. banks to report earning this season. Its peers such as Bank of America Corp (NYSE:BAC), JPMorgan Chase & Co. (NYSE:JPM) and Citigroup Inc (NYSE:C) are expected to report next week.
According to the average estimates, JPM is scheduled to report 19 percent decline in profit to $5.1 billion compared to the same period a year ago. The average profit expectation from BAC is $3.02 billion, suggesting 15 percent decline on a year-over-year basis while Citigroup is expected to announce 15 percent slid in profit to $3.26 billon.
Wells Fargo & Co (NYSE:WFC) has seen its mortgage book shrinking because of the high interest rates that have hurt mortgage borrowings. However, the CEO John Stumpf is trying to counter the problem by expanding operations in healthier businesses such as retail wealth management, auto lending, credit-card and investment banking to cover the shortfall in mortgage.
That strategy has worked out because the bank has avoided falling into losses even in the hardest of times in the housing sector. According to analysts, Wells Fargo & Co (NYSE:WFC)’s presence beyond mortgage is responsible for its earnings strength as can be seen in the latest quarter.