A Wells Fargo customer uses the ATM at a branch in San Bruno, California, August 8, 2023.
Justin Sullivan | Getty Images
Wells Fargo The report beat Wall Street expectations for third-quarter earnings and revenue on Friday, as benefits from rising interest rates offset slowing lending activity.
Shares of the bank rose 2.4% in premarket trading.
Wells Fargo posted earnings per share of $1.48 in the quarter, or $1.39 excluding discrete tax benefits. It’s unclear which number was comparable to Wall Street’s expectations, but both numbers are above LSEG’s consensus EPS of $1.24. Earnings are also significantly higher than the 86 cents per share earned in the same quarter a year ago.
Total revenue was $20.9 billion in the quarter, beating the consensus estimate of $20.1 billion, according to LSEG, formerly known as Refinitiv. Revenue was 6.5% higher than the $19.6 billion reported in the third quarter of 2022.
“Our revenue growth over last year included both an increase in net interest income and non-interest income as we benefited from higher rates and the investments we are making in our business,” Wells CEO Charlie Scharf said in a statement.
“Even though the economy has continued to be resilient, we are seeing the impact of the slowing economy with lower loan balances and charge-offs continuing to deteriorate slightly,” Scharf added.
Net income rose to $5.77 billion in the quarter ended September 30, from $3.59 billion a year earlier, driven by an 8% increase in net interest income.
Wells Fargo said provision for credit losses in the quarter included a $333 million increase in allowance for credit losses for commercial real estate agency loans and higher credit card loan balances.