Wells Fargo has cashed in on Donald Trump’s tax reforms
US banking giant Wells Fargo said today it benefited to the tune of $3.35bn (£2.46bn) in the fourth quarter of last year, after Donald Trump slashed corporation tax.
The lender said although it had incurred costs of $370m on adjustments to leveraged leases, low income housing and tax-advantaged renewable energy investments, as well as a $173m expense from repatriation, it had still made 67 cents per share after Trump cut corporation tax from 35 per cent to 21 per cent.
The lender's reputation was dragged through the mud in 2017 after it emerged in 2016 staff had opened millions of fake bank accounts on behalf of existing customers in order to hit targets. During the fourth quarter it took another $3.25bn pre-tax hit from litigation, on top of the $1bn it paid in the third quarter. However, it said the figure related to a "variety of matters", including mortgage-related regulatory investigations, as well as sales practices and other consumer-related matters.
However, the company reported net income of $22.2bn in the fourth quarter, up on the $21.9bn it made itn 2016, while diluted earnings per share rose to $4.10, from $3.99 the year before. Revenues crept up to $88.4bn, from $88.3bn the year before.
Tim Sloan, the bank's chief executive, said: Over the past year we have invested billions of dollars into our business and capabilities including risk management, accelerated the pace of innovation, increased our commitment to communities, enhanced team member benefits, and continued to execute on our business strategies to provide long-term value to our shareholders.
"The progress we made over the past year was evident in the fourth quarter in higher deposits, loan growth particularly in commercial loans, increased debit and credit card transactions, and record client assets under management in wealth and investment mManagement.
"While we faced challenges in 2017, we are a much better company today than we were a year ago, and I am confident that this year Wells Fargo will be even better.”