A Wells Fargo Bank sign is seen on Broadway on April 12, 2024 in New York City.
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Wells Fargo reported a 9% drop in net interest income on Friday, even as its second-quarter earnings and revenue beat Wall Street expectations.
Here’s how the bank did compared to Wall Street estimates, based on a poll of analysts conducted by the London Stock Exchange Group:
- Earnings per share: $1.33 vs. $1.29 expected
- Revenue: $20.69 billion vs. $20.29 billion expected
The San Francisco-based bank reported $11.92 billion in net interest income, a key measure of how much a bank earns from lending, down 9% from a year earlier. That was below the $12.12 billion analysts had expected, according to FactSet. The bank said the decline was due to the impact of higher interest rates on its funding costs.
Wells Fargo shares fell more than 5% in premarket trading.
“We continued to see growth in our fee-based revenue, offsetting the expected decline in net interest income,” CEO Charlie Scharf said in a statement. “The investments we made allowed us to take advantage of market activity in the quarter with strong performance in investment advisory, trading and investment banking fees.”
Wells Fargo’s net income fell to $4.91 billion in the second quarter, compared with $4.94 billion in the same quarter a year earlier. The bank set aside $1.24 billion for credit losses, which included a modest decrease in its provision for credit losses.
The bank repurchased more than $12 billion of common stock during the first half of 2024 and expects third-quarter earnings to increase 14%.
The stock is still up more than 22% this year, outperforming the S&P 500.