By Arasu Kannagi Basil and Saeed Azhar
(Reuters) – Fargo’s profits increased by 6% in the first quarter, as it received more costs in wealth management and the investment bank, but its CEO has warned that American rates are likely to slow economic growth.
American banks entered 2025 with upward perspectives, supported by resilient economy, transactions achievement and favorable declarations to companies in the new administration.
Optimism, however, collapsed in the last week when President Donald Trump’s fluctuating announcements on prices have worked for inflation that could tip the American economy in a recession.
“We support the will of the administration to examine obstacles to fair trade for the United States, although there are certainly risks associated with such important actions,” CEO Charlie Scharf said in a press release.
“We expect continuous volatility and uncertainty and are prepared for a slower economic environment in 2025, but the real result will depend on the results and the calendar of policy changes.”
However, the bank reiterated its annual forecasts on interest income. Bank shares based in San Francisco, California have increased by 2% in the market prior to the market. They have dropped 10% so far this year at the end.
The fourth net profit of the US lender reached $ 4.89 billion, or $ 1.39 per share, he said on Friday. This compared to $ 4.62 billion, or $ 1.20 per share, a year earlier.
In recent years, Wells Fargo has focused on reducing costs, resolution of regulatory problems and investment in its activities.
The bank continued to flow the workforce as part of a wider thrust to save money, while investing in technology to improve efficiency.
Wells Fargo expenses fell 3% to 13.89 billion dollars in the quarter compared to a year earlier.
The price turmoil has raised concerns that more borrowers are lacking on their loans. However, the quality of credit maintained in the first quarter of Wells Fargo allowing the bank to reduce provisions.
The provision of Wells Fargo for credit losses fell to $ 932 million during the quarter, against $ 938 million a year earlier.
Investment banking fees jumped 24% to $ 775 million compared to the previous year, driven by increased activity in debt capital markets.
The debt capital markets were a bright point in an otherwise gentle quarter for the investment bank. The request for disagreement slowed down when companies had trouble navigating through Trump’s pricing policies.
Wells Fargo advised $ 5.65 billion in Blackstone $ 5.65 billion in Marinas Safe Harbor and Fubo’s combination with Hulu + Live Disney television business among the transactions during the quarter.
