How profitable a bank is affects its safety and soundness. A bank can retain its earnings, increasing its capital cushion, or put them to work addressing problematic loans, potentially making the bank better prepared to withstand economic trouble. Conversely, losses take away from a bank's ability to do those things.
Wells Fargo Financial National Bank outperformed the average on Bankrate's earnings test, achieving a score of 30 out of a possible 30.
Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for Wells Fargo Financial National Bank was 56.38 percent, above the national average of 9.28 percent.
The bank recorded net income of $334.2 million on total equity of $1.39 billion for the twelve months ended June 30, 2017. The bank had an annualized return on average assets, or ROA, of 7.52 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.14 percent.