Wells Fargo & Co. WFC on Friday reported third-quarter 2024 net income of $5.11 billion, down 11.3% from a year earlier.
GAAP EPS of $1.42 was reported, beating consensus of $1.28. Sales decreased 2% to $20.37 billion. Analysts had expected sales of $20.41 billion.
Large U.S. banks reported an 11% year-over-year decline in net interest income to $11.69 billion due to higher funding costs reflecting a shift of customers to higher-yield deposit products and changes in deposit mix and pricing. reported higher yields, partially offset by higher yields on income-earning assets. .
Also read: Wells Fargo, Citigroup, Goldman Sachs poised to profit amid Fed rate cuts – Morgan Stanley.
Net interest income decreased 2% sequentially. This is due to price increases for sweep deposits in advisory brokerage accounts and the continued migration of customers to higher-yield deposit products and other deposit price changes.
Non-interest income was down year-over-year due to improved results from venture capital investments, higher asset-based fees in Wealth and Investment Management due to higher market valuations, higher investment banking fees, and higher net income from trading. Sales increased 12% to $8.67 billion. increased market operations and increased deposit-related fees;
“Our revenue profile is very different than it was five years ago because we have made strategic investments in many businesses and de-emphasized or sold others,” said CEO Charlie Scharf. Our sources are more diversified, and fee-based revenue grew 16% in the first nine months of this year, largely offsetting net interest income headwinds for a bank of our size and complexity. We have maintained strong credit discipline and driven significant operational efficiencies within the company, while making significant investments to create a risk and control environment suitable for the company.”
Net interest margin declined to 2.67% in the third quarter of 2024 from 3.03% in the year-ago period and 2.75% in the June quarter.
Average loan amount was $910.3 billion, down 3% year-over-year and 1% sequentially, due to declines in most loan categories, partially offset by growth in credit card loan balances. Ta. Average deposits remained stable at $1.3 trillion.
Guidance: Wells Fargo expects fiscal 2024 net interest income to decline approximately 9% from 2023 levels of $52.4 billion, compared to previous guidance of approximately 7% to 9% declines. Ta.
The company expects net interest income for the fourth quarter to be about the same level as the third quarter. We expect non-interest expenses to be approximately $54 billion in 2024.
Price Action: At last check on Friday, WFC stock was up 3% during the pre-market session to $59.48.
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