Banking stock under pressure: Wells Fargo & Co (NYSE: WFC)

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Wells Fargo & Co (NYSE: WFC) stock lost over 0.5% on July 13th, 2018 (as of 1:59 PM GMT-4; Source: Google finance),

For the second quarter of 2018, the total average deposits fell $25.8 billion to $1.3 trillion against pcp hurt by commercial deposits, especially from financial institutions, including a $13.5 billion fall from actions the group has taken in response to the asset cap included in the consent order issued by the Board of Governors of the Federal Reserve System on February 2, 2018.

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As per the segment performance, Community Banking rose $583 million, or 30 percent, against first quarter 2018. Revenue were flat during the second quarter against first quarter 2018, as lower market sensitive revenue and mortgage banking income were largely offset by higher net interest income and card fees.  Wholesale Banking reported a net income of $2.6 billion, which is a fall of 8 percent, against first quarter 2018. Revenue of $7.2 billion decreased $82 million, or 1 percent, against the earlier quarter, on the back of the gain on the sale of Wells Fargo Shareowner Services recognized in the first quarter and lower market sensitive revenue in the second quarter, which partially offset by higher net interest income and investment banking fees.

On the other hand, Nonperforming assets fell $305 million, or 4 percent to $8.0 billion, against first quarter 2018. Nonaccrual loans fell $233 million to $7.5 billion as compared to first quarter 2018 on the back of lower consumer real estate nonaccruals.

The quarterly loss rate in the second quarter was 0.26 percent (annualized), against 0.32% in the prior quarter and 0.27% in pcp. Commercial and consumer losses were 0.05 percent and 0.49 percent, respectively. Total credit losses fell $139 million to $602 million in second quarter 2018, against first quarter 2018. Commercial losses also fell by $11 million on the back of a better commercial and industrial loans.

The group announced innovative new products including a digital application for Merchant Services customers while enhanced Propel® Card, launching ‘Reestablished’ marketing effort. They announced new $200 billion commitment to financing sustainable businesses and projects.

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