Wells Fargo bank signage is seen on Broadway on April 12, 2024 in New York City.
Michael M. Santiago | Getty Images
Wells Fargo on Friday reported a 9% decline in net interest income, even though its second-quarter earnings and revenue exceeded Wall Street expectations.
Here’s what the bank did compared to Wall Street estimates, based on a survey of analysts by LSEG:
- Earnings per share: $1.33 versus $1.29 cents expected
- Revenue: $20.69 billion versus $20.29 billion expected
The San Francisco-based bank recorded $11.92 billion in net interest income, a key measure of what a bank makes on lending, marking a 9% year-over-year decline. That was below the $12.12 billion expected by analysts, according to FactSet. The bank said the decline was due to the impact of higher interest rates on funding costs.
Shares of Wells Fargo dropped more than 5% in premarket trading.
“We continued to see growth in our fee-based revenue offsetting an expected decline in net interest income,” CEO Charlie Scharf said in a statement. “The investments we have been making allowed us to take advantage of the market activity in the quarter with strong performance in investment advisory, trading, and investment banking fees.”
The stock is still up more than 22% this year, outperforming the S&P 500.
The bank repurchased over $12 billion of common stock during the first half of 2024 and it expects to increase third-quarter dividend by 14%.
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