NEW YORK–The nation’s banks reported strong earnings for the first quarter, including Wells Fargo, which managed to find ways to bolster its bottom line despite recent scandals and a decrease in loans and deposits.
Wells Fargo, which is the nation’s fourth-largest bank, reported a 16% increase in its first-quarter profits, largely due to lower expenses. The bank did report smaller revenue, but the decrease was less than what many analysts had expected.
The strong earnings follow the resignation of Tim Sloan as CEO. Sloan surprised many by stepping down in March after three decades with the bank. Wells Fargo did report a 3% decline in total average deposits during the first quarter to $1.3 trillion, saying it was the result of lower wholesale banking and a decrease in wealth and investment management deposits.
Consumer and small business banking deposits dipped 2% to $740 billion.
Wells Fargo reported its loan portfolio was $950.1 billion as of March 31, a slight decrease from one year earlier.
Wells Fargo, which continues to operate under a rare growth cap imposed by the Federal Reserve, said it cut noninterest expenses by 7% during the first quarter. It also continues to shrink its branch network, closing another 40 branches during the first quarter, leaving its total count down by 326 over the past year.
To placate its shareholders, Wells Fargo continues to buy back its stock. The bank repurchased $3.9 billion during the first quarter, up 86% from the year before. Including dividends, Wells Fargo said it returned $6 billion to shareholders in the first quarter.
JPMorgan Shows Robust Numbers
Meanwhile, the nation’s largest bank, JPMorgan Chase, reported record profits and revenue in its most recent earnings report for Q1. JPMorgan posted a 3% increase in average deposits and 4% growth in core lending.
The company said profit rose 5% to $9.18 billion, or $2.65 a share. Revenue also rose 5% to $29.9 billion, exceeding estimates by about $1.5 billion as net interest income grew 8%, thanks to the “impact of higher rates,” J.P. Morgan said in a released statement. Growth was especially strong in its retail lending business, where profit surged 19% to $3.96 billion.