Jan 15, 2021 (Baystreet.ca via COMTEX) -- Wells Fargo & Co /zigman2/quotes/203790192/composite WFC +1.48% reported a surprise quarterly profit on Friday, as stabilizing credit costs helped offset the hit from low-interest rates meant to prop up the ailing economy during the COVID-19 pandemic.
The San Francisco-based bank reported net income of $2.99 billion, or 64 cents per share, for the quarter ended Dec. 31, compared with $2.87 billion, or 60 cents per share a year earlier.
Analysts had expected a profit of 60 cents per share on average.
Costs associated with bad loans decreased $823 million compared to last year and remained far below the level seen in the first half of the year when the bank racked up more than $14 billion in provision expenses.
Other costs remained elevated at the bank, which has been in the regulators' penalty box since 2016. Rising costs do not help as the banking industry deals with near-zero interest rates and slower loan growth.
Wells Fargo's results reflect a topsy-turvy year in which the pandemic-induced recession forced lenders to sock away tens of billions of dollars to prepare for a wave of soured loans.
The bank released $757 million from its pile of reserves in the fourth quarter, largely because it sold a book of student loans.
Net charge-offs remained low at $584 million, down almost a quarter from a year earlier. So far, the government's expanded unemployment, stimulus checks, small business relief and loan deferral programs have staved off widespread loan losses, but bank executives caution they could still be coming.
WFC opened Friday down $2.59, or 7.5%, to 32.15.
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