Wells Fargo on Friday, October 11, released information about its earnings for the third quarter of the current year.
The mentioned financial institution, which is based in San Francisco and is one of the largest lenders in the United States, recorded indicators of activity in July-September 2024, partially exceeding Wall Street’s preliminary expectations for the dynamic of the corresponding figures. Against the background of this data, the bank’s securities began to rise in price. After information about the earnings of a financial institution was made public in the third quarter of 2024, the value of its shares showed an increase of more than 4% during morning trading.
Wells Fargo’s total revenue for July-September of the current year was fixed at $20.36 billion. For the same period in 2023, the corresponding figure amounted to $20.85 billion. The preliminary LSEG estimate provided that the total revenue of the financial institution for July-September of the current year would be fixed at $20.42 billion.
Adjusted earnings per share amounted to $1.52. The LSEG forecast provided that this indicator would be fixed at $1.28.
The net interest income of a financial institution for July-September of the current year amounted to $11.69 billion. This indicator fell by 11% compared to the result that was recorded for the same period last year. A preliminary estimate by FactSet provided that the net interest income of a financial institution for the third quarter of 2024 would be fixed at $11.9 billion. Wells Fargo stated that the decrease in this indicator is the result of higher funding costs associated with the migration of customers to higher-yielding deposit products.
Chief executive officer of the financial institution Charles Scharf noted that the current earnings profile of the bank is very different from its configuration, which existed five years ago. In this context, he separately underlined that the lender has been making strategic investments in many of its businesses and de-emphasizing or selling others. Charles Scharf also stated that the sources of revenue of the financial institution have become more diverse. In the corresponding context, he separately noted that the bank’s fee-based revenue showed growth of 16% in the first nine months of the current year. According to him, this result largely offsets net interest income headwinds.
The net income of a financial institution for July-September of the current year was fixed at $5.11 billion. For the same period in 2023, this figure amounted to $5.77 billion. It is worth noting that net income includes $447 million in losses on debt securities.
Wells Fargo also set aside $1.07 billion as a provision for credit losses. It is worth noting that last year the corresponding figure was fixed at $1.2 billion.
In the third quarter of the current year, the financial institution repurchased $3.5 billion of common stock. As a result of this decision, the nine-month total indicator exceeded the $15 billion mark. The corresponding figure increased by 60% year-on-year.
Since the beginning of the current year, the value of the financial institution’s shares has risen by 17%. It is worth noting that this indicator shows a lag behind the pace of the upward dynamic S&P 500.
Investment banking fees in the third quarter of the current year were fixed at $672 million. This indicator increased by 37% compared to the result recorded for the same period in 2023.
The non-interest income of a financial institution for July-September of the current year was fixed at $8.7 billion. This indicator showed an increase of 12% year-on-year.
It is worth noting that Wells Fargo is still under a imposed by the Federal Reserve asset cap limiting its balance sheet to its size at the end of 2017. Last month, the media reported that the financial institution has entered a key new phase of its almost seven-year effort to escape the mentioned restriction. It is worth noting that in the banking sector, this punishment is perceived as one of the most severe.
As we have reported earlier, JPMorgan Chase Earnings Exceed Estimates.
