Wells Fargo posts Q2 revenue, profit declines

Wells Fargo, the nation’s largest mortgage lender, saw its second-quarter revenue and profit decline as rising interest rates pushed people out of the housing market.

The San Francisco bank earned $3.1 billion in the period, or 74 cents per share, coming up short of the 80 cents per share forecast by analysts surveyed by data provider FactSet. Revenue was $17 billion, down 16% from last year and below the $17.5 billion Wall Street projected. The bank had revenue of $20.3 billion and earnings per share of $1.38 in the same period a year ago.

Investors appeared less concerned with the bank’s topline numbers and more impressed with an 8% increase in loan balances, however. Wells saw growth in consumer and corporate lending and new credit card products.

This week, Wells Fargo launched its fourth new credit card since the beginning of the year and it expects to offer several more rewards-based cards. The bank said its new credit card accounts are up more than 60% from a year ago and credit card spending increased 28%.

Wells’ revenue from its home lending division fell by 53% in the quarter, as the housing market cooled in the face of rapidly rising interest rates. Mortgage loan originations, including refinancing, fell sharply in the quarter.

The Mortgage Bankers Association reported Wednesday that mortgage applications have declined 14% from last year and refinancings are down 80%. Sales of existing homes have fallen for four straight months, during what is generally the busiest time of year in real estate. with the matter. The company also is pausing plans to further build out its new offices in Hudson Yards as it evaluates what to do with the space.

Nearby, Amazon also has cut back on the amount of space it had intended to lease from JPMorgan Chase & Co. at Hudson Yards, reducing the square footage it aims to take over, according to a person familiar with the matter. No deal has been signed yet.

Meta spokesperson Jamila Reeves said the company remains firmly committed to

New York and is looking forward to opening the Farley Building near Pennsylvania Station in the coming months.

“There are often a number of reasons why we wouldn’t proceed with a particular deal, including office utilization,”

Reeves said in an emailed statement. “The past few years have brought new possibilities around the ways we connect and work. We are working to ensure we’re making focused, balanced investments to support our most strategic long-term priorities.”