Wells Fargo & Company
Revenue fell 3% year over year to $20.15 billion. Analysts expected $20.75 billion.
The U.S. banking giant reported a 6% year-over-year drop in net interest income to $11.49 billion, driven by the impact of lower interest rates on floating rate assets, deposit mix, and pricing changes, lower loan balances, partially offset by lower market funding.
Noninterest income remained flat at $8.65 billion, including a gain on the sale of commercial non-agency third-party servicing business, an increase in asset-based fees in Wealth and Investment Management on higher market valuations, and higher investment banking fees, partially offset by lower results from venture capital investments, higher net losses on debt securities, and lower net gains from trading in Markets business.
Corporate and Investment Banking revenues increased 2% to $5.06 billion. Banking was down 4% to $1.77 billion, driven by the impact of lower interest rates, partially offset by lower deposit pricing and higher investment banking revenue on increased activity in debt capital markets.
Investment advisory fees and brokerage commissions are up 7%, driven by higher asset-based fees reflecting higher market valuations.
Investment banking fees increased by 24% due to higher activity in debt capital markets.
Average loans were down 2% year-over-year to $908.2 billion, driven by declines in commercial real estate and residential mortgage loans, up $1.8 billion sequentially driven by commercial & industrial loans.
Average deposits were up $12.9 billion, or 1%, year over year, as growth in customer deposits was partially offset by a reduction in higher-cost CDs issued by Corporate Treasury.
Average deposits are down $2.3 billion to 1,339.3 billion year over year, down 1% sequentially due to a reduction in higher-cost CDs issued by Corporate Treasury and declines in wholesale deposits, partially offset by higher consumer deposits.
Chief Executive Officer Charlie Scharf commented, "We produced solid results with diluted earnings per share increasing 16% from a year ago reflecting fee-based revenue growth across many of our core businesses, continued expense discipline, improved credit results..."
"We expect continued volatility and uncertainty and are prepared for a slower economic environment in 2025, but the actual outcome will be dependent on the results and timing of the policy changes," Scharf said.
Guidance: For fiscal year 2025, Wells Fargo expects net interest income to be ~1 to 3% higher than 2024 net interest income of $47.7 billion, unchanged from prior guidance.
Wells Fargo expects 2025 noninterest expense to be ~$54.2 billion, unchanged from prior guidance.
Price Action: WFC stock is up 0.67% at $63.53 during the premarket session at the last check Friday.
