(Reuters) - Wells Fargo & Co (WFC.N) on Friday reported a bigger-than-expected drop in quarterly profit, as lending activity slowed and it recorded higher expenses.
Net income applicable to common stock fell to $4.79 billion, or 98 cents per share, in the quarter ended June 30, from $5.45 billion, or $1.08 per share a year ago.
On an adjusted basis, the company’s earnings were $1.08 per share, excluding a 10-cent hit from an income tax expense, missing analysts’ estimates of $1.12 per share, according to Thomson Reuters I/B/E/S.
Shares fell 2.2 percent to $54.95 in premarket trade.
The bank said its total revenue fell 3.1 percent to $21.55 billion, with community banking - the area most closely tied to the 2016 sales practices scandal - posting a 1.25 percent dip in revenue.
Loan growth slowed across the board in the quarter, as rising interest rates discouraged borrowers. The Federal Reserve has increased interest rates twice this year.
Total interest expense rose 56 percent to $3.47 billion, while noninterest expense rose 3 percent to $13.98 billion.
Average loans fell 1.3 percent to $944.1 billion.
Peer JPMorgan Chase (JPM.N) reported an 18.3 percent rise in quarterly profit on Friday, while Citigroup’s (C.N) profit rose 16 percent on lower taxes and higher fee income.
Reporting By Aparajita Saxena in Bengaluru; Editing by Bernard Orr
