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Wells Fargo announced Thursday its 2022 first quarter earnings report ending on March 31, 2022. Despite showing lower income compared to Q1 of last year, the company remains optimistic as the year progresses.
According to Wells Fargo CEO Charlie Scharf, the company is focused on a number of goals for 2022, including building a better risk and control infrastructure, solving regulatory issues, and providing customers with intuitive and convenient digital products.
“We are moving forward… and continue to note that our path forward will be uneven but remain confident in our ability to continue to close remaining gaps over the next several years,” Scharf said in the press release.
According to Scharf, the company added 500,000 new mobile active users in the first quarter of 2022. The company plans to invest further in digital products, like Zelle, with a focus on providing a frictionless experience for customers moving money digitally.
“Providing our customers with simple, easy to use, and fast digital experiences is one of our most important strategic priorities,” Scharf said during the company’s earnings call. “In the first quarter, we began rolling out our new mobile banking experience for our customers in our consumer businesses, and feedback has been very positive.”
He added, “Digital adoption, which is critical to both delivering seamless digital experiences that our customers expect and reducing the cost to serve, has continued to increase with mobile active customers up 4% from a year ago.”
Additionally, the company will support financial wellness by introducing HOPE Inside centers within branches that offer financial education and guidance for clients. Wells Fargo will continue to reduce overdraft fees into 2022 as well.
The company reported an income of $3.67 billion on revenue of $17.6 billion, with an EPS of $0.88. The reported income is 21% lower than what it was at this time last year. In the press release, the company indicated the decrease was due to lower mortgage banking income, lower investment trading activity, and investment banking fees.
Credit card revenue was up 6% from last year, driven by higher balances and greater sales volume. According to Wells Fargo CFO Mike Santomassimo, credit card point-of-sale purchase volume was up 33% and new credit card accounts increased by 80% over the same period.
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Additionally, Santomassimo said teller transactions are down 45% from pre-pandemic levels. The company has decreased the number of branches by 12%, as customers continue to seek digital channels for their banking needs.
“Wells Fargo is positioned well to provide support for our clients in a slowing economy. While we will likely see an increase in credit losses from historical lows, we should be a net beneficiary as we will benefit from rising rates, we have a strong capital position, and our lower expense base creates greater margins from which to invest,” Scharf said in the press release.
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