A customer at Wells Fargo’s San Bruno branch in California uses the ATM on August 8, 2023.
Image Source: Justin Sullivan / Getty Images
Wells Fargo exceeded expectations from Wall Street in terms of third-quarter earnings and revenue, thanks to the boost from higher interest rates that offset the slowdown in lending activity.
Following the report, the bank’s shares rose by 3.1%.
Wells Fargo reported earnings per share of $1.48 for the quarter, or $1.39 excluding discrete tax benefits. While it remains uncertain what the exact comparable figure was to Wall Street’s expectations, both values surpass the LSEG consensus EPS of $1.24. Additionally, these earnings are significantly higher than the 86 cents per share earned during the same quarter last year.
The total revenue for the quarter reached $20.9 billion, surpassing the consensus estimate of $20.1 billion provided by LSEG (formerly known as Refinitiv). This revenue also marks a 6.5% increase from the $19.6 billion recorded in the third quarter of 2022.
In a statement, Wells CEO Charlie Scharf said, “Our revenue growth from a year ago included both higher net interest income and noninterest income as we benefited from higher rates and the investments we are making in our businesses.”
Scharf added, “While the economy has continued to be resilient, we are seeing the impact of the slowing economy with declining loan balances and slightly deteriorating charge-offs.”
Net income rose to $5.77 billion for the three months ending on September 30, compared to $3.59 billion during the same period last year. This increase was primarily driven by an 8% rise in net interest income.
Wells Fargo disclosed that the provision for credit losses in the quarter included a $333 million increase in the allowance for credit losses for commercial real estate office loans and higher credit card loan balances.
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