Wells Fargo 2Q Profit Jumps 12% as Loss Provisions Decline

Wells Fargo & Co.'s second-quarter earnings rose 12%, beating analysts' estimates, as the company's credit-loss provisions declined sharply.

Shares jumped 5.6% to $27.35 premarket. As of Tuesday's close, the stock had fallen 4% so far this year.

Wells has posted mostly better results of late, though the bank hasn't yet proved that its improvement is sustainable. In April, Wells said credit "has turned the corner," though the company raised its loan-loss provisions and saw its bottom line worsen. Fellow giant banks have reported mixed second-quarter results, with bottom lines topping Wall Street's expectations.

The company reported a profit of $2.88 billion, or 55 cents a share, compared with $2.58 billion, or 57 cents a share, a year earlier. Shares outstanding rose 17%. Revenue declined 5% to $21.39 billion.

Analysts polled by Thomson Reuters had most recently forecast earnings of 48 cents a share on $21.4 billion in revenue.

Credit-loss provisions were $3.36 billion, down from $5.09 billion a year earlier and $5.33 billion in the prior quarter. Net charge-offs, or loans lenders don't think are collectible, rose to 2.33% of average loans from 2.11% a year earlier but fell from 2.71% in the prior quarter.

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