Wells Fargo & Co. today reported fourth quarter net income of $2.8 billion, helped in part by significantly higher credit and debit card fees. Wells Fargo reported a loss of $2.7 billion during the same quarter a year ago. Total bank revenues were $22.7 billion, up 139% compared with $9.5 billion a year ago.
Net charge-offs on credit cards as a percentage of average loans reached 10.61% during the quarter, up 192 basis points from 8.69% a year earlier but down 36 basis points from 10.97% during the third quarter.
Combined credit and debit card fees during the quarter totaled $961 million, up 63.2% from $589 million a year earlier. Wells, which does not break out specifics about its credit or debit card fees, attributed the increase in fees to “seasonally higher volumes and higher debit card penetration.”
Wells reported that its community-banking unit issued $16.7 billion in card loans during the quarter, and its Wells Fargo Financial unit issued $7.3 billion in card loans.
The average credit card customer’s balance at the end of the year was $23,717, up 15% from $20,626 a year earlier.
Wells noted in a statement that credit cards represent 3% of its $783 billion total loan portfolio.
“Fourth quarter credit results were in line with our expectations,” Mike Loughlin, Wells chief credit and risk officer, said in a statement. “While losses remained elevated during the quarter as expected, a more-favorable economic outlook and improved credit statistics in several portfolios further increase our confidence that our credit cycle is turning, provided economic conditions do not deteriorate.”
