Wells Fargo & Co. WFC (NYSE:WFC) reported net income of $4.91 billion, down 1% year over year in Q2 2024.
The company Reported GAAP earnings per share were $1.33, beating the consensus of $1.29. Revenue rose 1% to $20.69 billion. The amount is expected to reach $20.29 billion..
US banking giant Reported Net interest income decreased 9% year-over-year to $11.9 billion due to the impact of higher interest rates on funding costs, including the impact of lower deposit balances and customer migration to higher-yielding deposit products, higher deposit costs, and lower loan balances, partially offset by higher yields on income-producing assets.
Net interest income decreased 2% quarter-on-quarter, driven by the impact of higher funding costs and lower loan balances, which was partially offset by a modest reallocation of cash balances into higher-yielding securities.
Non-interest income increased 19% year-over-year to $8.77 billion, driven primarily by higher trading revenues in the Markets business, higher investment banking fees, increased asset-based fees in Wealth and Investment Management on higher market valuations, and improved results from venture capital investments.
“We continued to see growth in our fee-based revenue, offsetting the expected decline in net interest income,” commented CEO Charlie Scharf. “The investments we made allowed us to capitalize on market activity in the quarter with strong performance in investment advisory, trading and investment banking fees. Credit performance was consistent with our expectations, commercial loan demand remained subdued, we saw growth in deposit balances across all of our businesses, and the pace of clients reallocating cash to higher-yielding alternatives slowed.”
Net interest margin fell from 3.09% a year ago and 2.81% in March to 2.75% in Q2 2024.
Average loans fell 3% year-over-year and 1% quarter-over-quarter to $917 billion, driven by declines in most loan categories, which were partially offset by higher credit card loan balances. Average deposits remained flat at $1.35 trillion.
guidance: For fiscal year 2024, Wells Fargo repeat Net interest income could be about 7% to 9% below the full-year 2023 level of $52.4 billion.
The bank expects non-interest expenses in 2024 to reach about $54 billion, up from previous guidance of about $52.6 billion.
Price movement: At last check on Friday, WFC shares were down 5.91% at $56.61 during the pre-market session.
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This article Wells Fargo Q2 Earnings: Net Interest Margin Declines, Average Loans Declines, Stocks Drop Originally appeared on Benzinga.com
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