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Wells Fargo revenue misses on weakness in consumer banking

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Wells Fargo revenue misses on weakness in consumer banking
A Wells Fargo ATM machine is shown in Los Angeles, California, U.S. October 19, 2018. REUTERS/Mike Blake   -   Copyright  MIKE BLAKE(Reuters)
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(Reuters) – Wells Fargo & Co <WFC.N> on Tuesday reported quarterly revenue that missed analysts’ estimates, as revenue across all its banking units declined, especially at community banking, the unit at the centre of its 2016 sales scandal.

Shares of the San Francisco-based lender were down 1.22 percent at $48.42 in early trading.

The bank’s total revenue fell 5 percent to $20.98 billion in the fourth quarter, while consumer loans fell 3 percent. Analysts on average were expecting revenue of $21.73 billion, according to IBES data from Refinitiv.

Wells managed to make good on its promise to reduce costs to combat expenses related to its sales scandal. Noninterest expenses fell 21 percent to $13.34 billion.

For the year, expenses declined 4 percent to $56.13 billion, but were higher than $54.5 billion target the bank had set last year.

Chief Financial Officer John Shrewsberry reiterated that the bank was “on track” to meet its 2019 expense target.

Net income applicable to shareholders was $5.71 billion, or $1.21 per share, in the fourth quarter ended Dec. 31, compared with $5.74 billion, or $1.16 per share, a year earlier.

The year-ago quarter included a $3.35 billion one-time boost related to President Donald Trump’s U.S. corporate tax overhaul.

Analysts on average were expecting $1.19 per share, according to IBES data from Refinitiv. It was not immediately clear if the reported figures were comparable.

Earlier in the day, JPMorgan Chase & Co <JPM.N> reported a lower-than-expected quarterly profit due to weakness in its markets trading business, sending its shares down 3 percent in early trading.

(Reporting By Aparajita Saxena in Bengaluru, Imani Moise in New York; Editing by Bernard Orr and Anil D’Silva)

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