Wells Fargo’s 2Q profit, interest rates, rise
Wells Fargo said its profit edged higher in the second quarter as the bank got a boost from rising interest rates and the planned sale of its insurance service business.
The San Francisco-based bank said its profit grew 5 percent to $5.8 billion, or $1.07 per share. That was more than the $1.01 per share expected by analysts, according to FactSet.
The Federal Reserve has raised interest rates three times since December, which lets banks charge more money for lending, and Wells Fargo said its net interest income climbed 6 percent to $12.5 billion.
Wells Fargo, JPMorgan and Citigroup all disclosed their second-quarter results Friday, and said they collected more money on interest because of rising interest rates, which let the banks charge more money for lending. The Federal Reserve has raised interest rates three times since December.
However, JPMorgan Chase said it won’t make as much income from interest as it previously expected. That helped send shares of all three companies lower. Wells Fargo fell 73 cents, or 1.3 percent, to $54.87.
The company reported a gain of 4 cents per share from the sale of the insurance business to USI Insurance Services, which Wells Fargo announced in late June. On Friday Wells Fargo said it will sell its shareholder services business to Equiniti Group for $227 million.