Wells Fargo reports 86% increase in quarterly profits

• Wells Fargo posted revenue of $20.86 billon, a 13% increase from a year ago

• Wells Fargo also released $875 million that the bank has kept aside to cover loan losses

Wells Fargo & Co (NYSE: WFC) reported better-than-expected profit in the fourth quarter as the U.S. economy started recovering and more customers opted for loans.

The bank said on Friday that its profit soared 86% in the quarter making $5.75 billion, compared to $3.09 billion a year ago. The per-share profit of the bank was $1.38, beating analysts’ expectations of $1.11.

"The changes we've made to the company and continued strong economic growth prospects make us feel good about how we are positioned entering 2022," Chief Executive Officer Charlie Scharf said in a statement.

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The San Francisco-based bank posted revenue of $20.86 billon, a 13% increase from a year ago, beating expectations of $18.79 billion.

Wells Fargo also released $875 million that the bank has kept aside to cover loan losses during the Covid-19 pandemic.

Loans issued by the bank in the quarter rose 1% from a year ago and 4% from the third quarter.

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Shares of Wells Fargo were nearly flat in the premarket trading on Friday, and have risen about 17% since the beginning of the bank.

Investors are optimistic about bank profit as the Federal Reserve in expected to increase rate, allowing banks to charge more on loans.

Promising result of Wells Fargo indicate expected growth of the sector in the year as both interest rates and loan demand are expected to rise.

Picture Credits: WSJ