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Wells Fargo reported third-quarter earnings that surpassed Wall Street’s expectations, leading to a surge in its stock price. The bank’s adjusted earnings per share came in at $1.52, beating the expected $1.28, while revenue totaled $20.37 billion compared to the anticipated $20.42 billion. Despite a significant drop in net interest income, the bank’s shares climbed over 4% following the positive results.
The decline in net interest income, down 11% from the previous year to $11.69 billion, was attributed to higher funding costs due to customers shifting to higher-yielding deposit products. CEO Charles Scharf noted the bank’s strategic shift in business focus, resulting in a more diverse revenue stream with a 16% growth in fee-based revenue offsetting some of the net interest income challenges.
In the third quarter, Wells Fargo saw net income decrease to $5.11 billion, or $1.42 per share, from $5.77 billion, or $1.48 per share, a year ago. The bank also set aside $1.07 billion for credit losses, lower than the previous year’s provision. Additionally, Wells repurchased $3.5 billion of common stock in the quarter, totaling over $15 billion in the first nine months of the year.
Despite a 17% increase in its stock price in 2024, Wells Fargo’s performance still lags behind the S&P 500 index.
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Emily Jensen, graduated from the London School of Economics and Political Science (LSE) in the UK in 2015 with a degree in Economics. She specializes in financial markets and international trade. After graduating, she worked as an analyst at an investment bank in London, where she developed expertise in global economic trends. She later transitioned into consulting, focusing on fintech ventures and providing insights into global economic developments. Emily is passionate about the intersection of finance and technology and aims to drive innovation in the financial sector.
