Citigroup

Gerard Cassidy, RBC Capital Markets Managing Director, joins 'Closing Bell Overtime' to talk quarterly banking results.» Mehr auf youtube.com

(Reuters) -Wells Fargo's profit beat expectations in the first quarter as the bank cut costs and set aside less money to cover potential loan losses, but its CEO warned on Friday that U.S. tariffs risk slowing economic growth. U.S. banks entered 2025 with a bullish outlook, backed by a resilient economy, resurgent dealmaking and business-friendly pronouncements from the Trump administration. aAdsList.push('Article'); aAdsListSize.push([300, 250]); aAdsListCA.push(null); The optimism unraveled over the last week as President Donald Trump's fluctuating tariff announcements stoked concerns about inflation that could tip the U.S. economy into recession. "We support the administration's willingness to look at barriers to fair trade for the United States, though there are certainly risks associated with such significant actions," CEO Charlie Scharf said in a statement. "We expect continued volatility and uncertainty and are prepared for a slower economic environment in 2025, but the actual outcome will be dependent on the results and timing of the policy changes." Shares of the San Francisco, California-based bank fell 3% in early trading as analysts were disappointed with a drop in interest income. Shares have fallen 10% this year as of the last close. The bank's net interest income - the difference between what it earns on loans and pays on deposits - fell 6% to $11.5 billion in the quarter, missing estimates of $11.84 billion. Executives have previously said interest income would be relatively stable in the first half of 2025, with more growth in the second half. Citigroup analysts said in a note the softer NII was due to weaker than expected loan growth and lower than expected commercial loan yields. Still, Wells Fargo reiterated its prior forecast that annual interest income would rise between 1% and 3% in 2025. A slower start to the year on NII means a bigger challenge to get to the forecast range, Piper Sandler analysts said, adding that the path to those expectations requires more detail. The bank again repositioned a portion of its securities investment portfolio to shore up its interest income. It booked $149 million of losses on debt securities in the quarter.LOWER CREDIT LOSS PROVISIONS Credit quality held up in the first quarter at Wells Fargo, allowing the bank to lower provisions. Wells Fargo's provision for credit losses fell to $932 million in the quarter, compared with analysts' expectation of $1.22 billion. Chief Financial Officer Michael Santomassimo told reporters customer behavior has been stable. On the corporate and commercial side, many people are pausing investments to gain clarity about tariffs, Santomassimo said. On an adjusted basis, Wells Fargo earned $1.33 per share, beating Wall Street expectations of $1.24, according to estimates compiled by LSEG. The fourth-largest U.S. lender's expenses fell 3% to $13.89 billion in the quarter, compared with estimates of $14.06 billion. The bank has continued to slash its workforce as part of a broader push to save money, while also investing in technology to improve efficiency. Wells Fargo employed 215,367 people on March 31, compared with 217,502 at the end of 2024. The workforce has fallen every quarter since the third quarter of 2020. Investment banking fees jumped 24% to $775 million from a year earlier, driven by increased activity in debt capital markets.REGULATORY PROGRESS Wells Fargo is still operating under a $1.95 trillion asset cap that prevents the bank from growing until regulators deem it has fixed problems from a 2016 fake accounts scandal. The asset cap has curtailed Wells Fargo's ability to take in more deposits or expand businesses such as investment banking and trading. The bank has undergone a multi-year effort under Scharf's leadership to fix failings in its governance and risk management. Progress on the regulatory front has accelerated this year, with five consent orders closed so far, compared with one in 2024. "We remain confident that we will complete the work needed to close out our other orders," Santomassimo said. The bank has closed 11 consent orders since 2019 and still has three open that it is working to address. (Reporting by Arasu Kannagi Basil in Bengaluru and Saeed Azhar in New York, editing by Lananh Nguyen, Anil D'Silva and Rod Nickel) By Arasu Kannagi Basil and Saeed Azhar» Mehr auf marketscreener.com

Profits at major U.S. banks beat forecasts in the first quarter as stock trading jumped, but executives warned on Friday that sweeping tariffs could fuel risks and weigh on economic growth.» Mehr auf reuters.com