Wells Fargo’s Wealth, Brokerage and Retirement division reported a $544 million profit in the second quarter, up 25 percent from the $434 million reported in June 2013, and up 15 percent sequentially. Chief Financial Officer John Shrewsberry said the strong growth was due to continued client demand for plan-based solutions and higher gains on deferred compensation plan investments.
Overall, the bank’s second quarter performance met analysts’ expectations of $1.01 earnings per share, with a net income of $5.73 billion, up from $5.52 billion a year earlier. Revenues for the bank were down slightly, $21.1 billion, from the $21.4 billion reported a year ago. Analysts polled by Seeking Alpha expected revenue of $21.06 billion.
“The primary drivers of Wells Fargo’s business remained strong in the second quarter, with broad-based loan growth, increased deposit balances, and improved credit quality,” Shrewsberry said in a statement Friday.
Brokerage advisory fees, commissions and other wealth management fees continue to make up $2.28 billion, or 22 percent, of Wells Fargo’s overall noninterest income. The brokerage business also cut expenses by 1 percent from the prior quarter.
Revenue for the unit increased 9 percent from a year ago, to $3.55 billion in the second quarter. Client assets within the retail brokerage business also increased, to $1.4 trillion, up 12 percent from the same period a year ago. Assets increased 2 percent from last quarter.
Wells Fargo Advisors, its St. Louis-based employee retail brokerage unit, reported managed account assets of $409 billion in the first quarter, up 24 percent year-over-year. The increase was largely driven by increased market valuations and net flows, the company says.
Advisor headcount for the retail brokerage grew to 15,189 during the second quarter, up from the 15,146 advisors the company reported last quarter.
CEO John Stumpf said the company was building “strong relationships” across Wells Fargo’s different business units, reporting the wealth, brokerage and retirement division’s cross-sell ratio was 10.44 products per household during the second quarter.