Wells Fargo beat estimates for earnings per share last quarter, but reported a decrease in its largest loan segment and has cut its full-year guidance.
Diluted earnings per share were US$1.60, or $1.54 excluding one-time costs. This is above LSEG estimates of $1.41, and the $1.39 seen one year ago.
“Our second quarter results reflect the progress we are making to consistently produce stronger financial results with net income and diluted earnings per share up from both the first quarter and a year ago. Our efforts to increase fee-based income drove revenue growth and both net interest income and noninterest income grew from the first quarter,” said Wells Fargo CEO Charlie Scharf.
“We are investing in our businesses but remain focused on expense management. While there continue to be risks as we look forward, activity levels have remained consistent and our strong credit performance continues to point to the strength of our commercial and consumer customers’ financial position.”
The company’s total revenue was US$20.82 billion, up from the $20.69 billion seen one year ago.
Net income was US$5.49 billion, compared to $4.91 billion in 2024’s second quarter. Wells Fargo credited this to the impact of lower interest rates on floating rate assets.
Average Consumer Banking and Lending loans, its largest loan segment, were US$315.4 billion, down 3% from one year ago. Corporate and Investment Banking loans increased 4% to $285.9 billion, while Commercial Banking loans were up 1% to $226.5 billion.
Consumer Banking and Lending deposits were flat year-over-year at US$781.4 billion, with Corporate and Investment Banking loans up 7% to $202.4 billion.
Wells Fargo’s CET1 was 11.1%, up from 11.0% last year. It held US$1.93 trillion in assets, up from $1.91 trillion year-over-year.
The company’s full-year guidance now projects net interest income to remain flat from 2024 at US$47.7 billion, down from its previous guidance of 1-3% growth. Wells Fargo said this revision was due to a slump in net interest income in its Markets business.
Wells Fargo’s (NYSE: WFC) share price closed at US$78.86, down from its previous close of $83.39. Its market capitalisation is $256.62 billion.
