FuGuo bank Net interest income reported on Friday fell 9%, although its second-quarter profit and revenue topped Wall Street expectations.
Here’s how the bank’s approach compared with Wall Street estimates, according to a survey of analysts by London Stock Exchange Group (LSEG):
- Earnings per share: $1.33, expected $1.29
- income: US$20.69 billion, expected US$20.29 billion
The San Francisco-based bank recorded $11.92 billion in net interest income, a key measure of bank loan income, down 9% from the year. That was below analysts’ expectations of $12.12 billion, according to FactSet. The bank said the decline was due to the impact of rising interest rates on funding costs.
Wells Fargo shares fell nearly 7% in Friday trading.
“Our fee income continues to grow, offsetting the expected decline in net interest income,” Chief Executive Charlie Scharf said in a statement. “The investments we have been making position us to capitalize on the market this quarter. activity, with strong performance in investment advisory, trading and investment banking fees.”
Wells Fargo’s second-quarter net income fell to $4.91 billion (or $1.33 per share) from $4.94 billion (or $1.25 per share) in the same period last year. The bank set aside $1.24 billion in provisions for credit losses, including a small reduction in those loss reserves. Revenue rose to $20.69 billion in the quarter.
The bank repurchased more than $12 billion of common stock in the first half of 2024 and expects to increase its third-quarter dividend by 14%.
The stock is up more than 22% this year, outperforming the S&P 500.
