To The Moon

Top 10 US bank $Wells Fargo(WFC)$ reported its Q1 2023 quarterly earnings on Fri, 14 Apr 2023.

Not a moment too soon as I have posted about Wells Fargo on 2 separate occasions.

• Wells Fargo Q4 2022 quarterly earnings !

• 13 Apr 2023 post on which of the 3 Banks will report best earnings !

Just the right time to do a wrap up and not a moment too soon.

Let’s See If

• Its Q1 2023 earnings is “better” than its Q4 2022 and

• Its performance ranking in my April posting is accurate. LOL !

• Latest revenue was $20.7 Billion versus $19.7 Billion (Q4 2022); that’s a +5.08% gain.

• Net income was $4.9 Billion versus $2.9 Billion (Q4 2022); that’s a +68.97% gain.

• Earning per share was $1.23 versus $0.67 (Q4 2022); that’s a +83.58% gain.

• Book value per share was $43.02 vs $41.89; again a +2.7% gain.

Detailed breakdown of $WFC's revenue source:

1. Consumer Banking & Lending continues to contribute the lion’s share to revenue; standing at 44.1%. Compare to its Q4 2022 contribution of 46.3%, it has declined by -2.20%.

2. Commercial Banking remains 4th largest contributor at 15.6%; up by +0.2% from 15.4% (Q4 2022)

3. Corporate & Investment Banking remains as 2nd largest contributor at 23.1%; up by +2.9%

4. Wealth & Investment Mgmt remains as 3rd largest contributor at 17.3%. It still decline by -0.8% when compared to its Q4 2022 contribution.

Highlights :

Historically, both “Corporate & Investment Banking” and “Wealth & Investment Mgmt” have been the bank’s weaker 2 of the 4 business segments.

Looks like “Corporate & Investment banking” have pulled their socks up and bucked the trend. Business contributed additional +2% to company’s revenue.

Unfortunately the same could not be said for business segment “Wealth & Investment Mgmt”. dipping by -0.8%. It remains the weakest of 4 main business segments.

• Wells Fargo loans extension has dipped by -0.84%.

• Its deposits has also seen a net outflow of -1.59% to $1,362 Billion.

• While long term debt remains more or less status quo.

Here’s What I Think About Wells Fargo :

In the movie “Cabaret” there was a song sung by Liza Minnelli - “Money Makes The World Go Round”.

I like to think that this pretty much sums up the importance of having money and how this “commodity” is closely linked to banks; that has become so integrated in any economies.

For Wells Fargo,

• I think it is worth monitoring and when the price is “right”, take a bite.

• It has a strong franchise, a loyal customer base, and a solid capital position.

• With its focus on improving its efficiency and risk management, that should help it to ensure past regulatory issues do not happen again.

• Its participation to support the recent US financial system during the March events that impacted the banking industry surely accounts for something

• Its size and range of services offer many benefits to its customers and shareholders.

Wells Fargo closing price on 21 Apr 2023

• Do you think Wells Fargo deserves a look and possible investment ?

• Do you think there will be a “better” entry price for all banks stocks in the coming months ?

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