Wells Fargo reported a 9% increase in fourth-quarter net profit on Friday, despite a heavy charge related to a settlement with the US banking regulator.

The San Francisco, California-based company posted a net profit of $3.5 billion for the last three months of the year, compared with $3.1 billion a year earlier.

The financial group points out that its Q4 accounts include a $1.9 billion charge for a 'special' revaluation by the US Federal Deposit Insurance Corporation (FDIC).

Added to this was a provision of $969 million for future severance payments as part of its restructuring plan.

Also of concern, provisions for bad debts rose to almost $1.3 billion in the past quarter, compared with $957 million in Q4 2022.

We are closely monitoring the state of the credit market, and while it is true that we are seeing some deterioration, this is in line with our forecasts", said Charlie Scharf, Chief Executive Officer.

Following this publication, the stock lost 1.6% in pre-market trading on Wall Street.

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