Wells Fargo Shares fell on Friday even after fourth-quarter profit rose from a year ago, as the bank warned that net interest income for 2024 could be significantly lower year over year.
Here's what the bank reported versus what Wall Street expected based on a survey of analysts by LSEG, formerly known as Refinitiv:
· Revenue: $20.48 billion versus $20.30 billion expected
Wells Fargo shares fell 1% before the bell.
Total revenue for the period was $20.48 billion. That's a 2% increase from the fourth quarter of 2022, when Wells Fargo posted revenue of $20.3 billion. The bank also posted net income of $3.45 billion, or 86 cents per share, up slightly from $3.16 billion, or 75 cents per share, a year ago.
Earnings were reduced by $1.9 billion, or 40 cents per share, due to a special assessment from the FDIC and a $969 million, or 20 cents, from severance payments. Wells Fargo also booked a tax benefit of $621 million, or 17 cents per share.
“Looking ahead, our business performance remains sensitive to interest rates and the health of the U.S. economy, but we are confident that the actions we are taking will lead to stronger returns throughout the cycle,” CEO Charlie Scharf said in a press release. . “We are closely monitoring lending and while we see modest deterioration, it remains in line with our expectations.”
Wells Fargo said net interest income fell 5% from a year ago to $12.78 billion, and warned that figure for the year could be 7% to 9% lower from $52.4 billion in 2023. The decrease in net interest income was due to lower interest income. deposits and loans, but somewhat offset by higher interest rates, the bank said.
Provisions for credit losses rose 34% to $1.28 billion from $957 million a year ago, as provisions for credit losses rose for credit card and commercial real estate loans. Wells Fargo said this was partially offset by lower auto loan fees.
Wells Fargo shares are essentially flat this year, after rising more than 19% in 2023. Yields rose over the period, with 10-year Treasury yields rising above the 5% threshold in October before ending the year below 3.9% finished.
This story is developing. Check back later for updates.