EU FINANCIALS: Wells Fargo (WFC) - Q1 earnings preview
Results expected Friday. Given that it trades relatively wide to other US banks in EUR it may be a relative outperformer during the quarter as long as provisions on the consumer side remains low and the CRE book doesn’t deteriorate.
- Consensus expectations show c.2% revenue growth and 1% pre-tax income growth QoQ
- CIB is expected to drive income growth. Trading revenue is expected to show a c.30% increase QoQ and NIM for the division is expected to be 8% higher leading to a 26% bump in pre-tax income.
- Expectations for the consumer and commercial side of WFC are not particularly high. NIM is expected at 2.72%, marginally higher than Q4. This drives flat revenue and pre-tax income in consumer. Provisions are expected to be reasonably steady.
- Analysts have $111m of provisions forecast for the commercial division, higher than the 33m in Q4 but below the spike of $143m in Q1 24. Pre-tax income numbers expected to fall on flat revenue and higher provisions.
- Provisions on the CRE portfolio and general loan demand will be areas of focus.
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