Citing the continued effects of the economic downturn, Wells Fargo & Co. today reported a higher credit card charge-off rate on a slightly smaller pool of credit card receivables for the first quarter ended March 31 compared with the same period last year.
The charge-off rate for the quarter was 11.17% of average loans, up 104 basis points from 10.13% a year ago. Wells charged off $643 million in credit card loans, up 10.5% from $582 million.
Total credit card outstandings were $22.5 billion at the end of March, down 1.3% from $22.8 billion a year earlier. The company said it has tightened card-underwriting criteria while allowing fewer balance-transfers and credit-line increases.
Income from card fees during the quarter rose 1.4%, to $865 million from $853 million. Wells does not break out credit and debit card fees. Income from processing and other card fees rose 13.9%, to $467 million from $410 million.
Wells said its branch network generated $17.6 billion in card loans during the quarter compared with its Wells Fargo Financial unit, which accounted for $4.9 billion. Credit cards accounted for some 3% of Wells’ total loan portfolio, the company said.
As a company, Wells reported net income of $2.55 billion for the quarter, down 16.4% from $3.05 billion a year earlier. Total bank revenues were $21.45 billion, up 2% from $21.02 billion.
The economy “continues to present challenges,” and the bank has not seen consumer and business-spending levels resume to previous levels, John Stumpf, Wells chairman and CEO, said in a statement.