Wells Fargo reported on Friday (Jan. 15) as part of its Q4 2020 earnings that its provision for credit losses fell $823 million. The bank attributed the drop mostly to a $757 million reserve release due to the announced sale of its student loan portfolio and lower net charge-offs.
“Credit continues to perform well as both consumers and companies have benefited from accommodations, ongoing fiscal and monetary stimulus, and [an] improving economic outlook,” CEO Charlie Scharf said on a call with analysts.
Wells Fargo saw credit card point of sale (POS) volume of $22.9 billion in Q4, which was slightly down from $23.1 billion a year ago. The bank saw heightened debit card usage during Q4. Debit card POS purchase volume hit $105.3 billion during the period, up from $95.2 billion a year ago. It reported 32 million active digital customers (online and mobile) in Q4, with the inclusion of 26 million mobile active customers. Those figures were essentially flat from Q3.
All in, Wells Fargo reported $3 billion in net income (64 cents per diluted share) for the period on $17.925 billion in revenue. Its top-line results fell short of analyst expectations for $18.13 billion in revenue, but its earnings results exceeded estimates of 60 cents per share.
“The benefits from both fiscal and monetary stimulus continue to provide important support for many, and the additional $900 billion stimulus is an important step in helping those who are still in need,” Scharf said. “Overall, our customers continue to be in [a] much stronger position than we would have anticipated when this crisis began, but unemployment levels remain high, inventory levels remain lower than pre-pandemic levels and confidence to invest is dependent on an effective bridge until broad-based vaccination can be accomplished.”