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By Dhirendra Tripathi – Wells Fargo stock (NYSE:) rose 2.7% on Friday after the lender’s profit and revenue came in ahead of estimates, driven by the CEO’s focus on cutting costs. 

Lower provisioning, higher non-interest income, one-off gains on sale of businesses and higher investment banking fees in a booming market for advisory services also boosted profits.

Net profit soared 86% to $5.8 billion, aided by a $943 million gain from the sale of the bank’s corporate trust and asset management units. It was also boosted by lower provisioning because of improving credit quality.

Non-interest expenses fell 11%, to $13 billion, driven by lower personnel costs, as well as smaller restructuring charges and operating losses, capping a year of austerity at the bank under Chief Executive Officer Charlie Scharf’s ambitious plan of $10 billion annual cost savings in the long term.

According to Reuters, Wells Chief Financial Officer Mike Santomassimo said the bank is aiming for an additional $3.3 billion in cost cuts in 2022, as it attempts to have more consumers bank online while reducing its own real estate presence.

Wells Fargo has been operating under a $1.95 trillion asset cap imposed by the Federal Reserve in 2018, which has limited its ability to boost interest income.

“We also remain cognizant that we still have a multiyear effort to satisfy our regulatory requirements – with setbacks likely to continue along the way – and we continue our work to put exposures related to our historical practices behind us,” Scharf said.

The lender has found itself boxed by the regulators after a sales practices scandal came to light in 2016. It has since paid billions in fines.

Net interest income decreased 1%, primarily because of lower yields on earning assets and lower loan balances reflecting soft demand and elevated prepayments by consumers.

Noninterest income increased 27%, driven by strong results in the bank’s affiliated venture capital and private equity businesses. Investment banking fees improved on higher debt underwriting and advisory fees.

Home lending was down 8% primarily due to weaker mortgage banking income driven by lower gain on sale margins and fewer originations. Vehicle loans business did well, revenue rising 17% there.

Loans issued late in the year were up 1% from a year earlier and 4% higher than the prior quarter. 

Total revenue rose 13%, to $21 billion.

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