Wells Fargo & Co, the fourth-largest U.S. bank by assets, posted a higher quarterly profit, beating analysts' estimates, as it dipped into funds previously set aside for bad loans.
The San Francisco-based company said second-quarter net income for common shareholders was $3.73 billion, up 30 percent from $2.88 billion a year earlier.
Earnings per share rose to 70 cents from 55 cents. Analysts, on average, had expected 68 cents per share, according to Thomson Reuters I/B/E/S.
The results benefited from the company's decision to draw down reserves against loan losses by $1 billion during the quarter. Net loan charge-offs declined to $2.84 billion from $3.21 billion in the first quarter and $4.49 billion in the year-ago second quarter.
"While the economic recovery continues to be slower than expected, there are signs that businesses are investing for growth," Chief Executive John Stumpf said in the company's earnings release.
The bank's book of loans to businesses grew to $330 billion at the end of June, up 2.3 percent from three months earlier.
© 2022 Thomson/Reuters. All rights reserved.