Wells Fargo Stock Climbs as Strong Q3 Results Beat Expectations
Wells Fargo reported stronger-than-expected third quarter earnings on Friday, as revenue growth across both its consumer and commercial divisions lifted investor confidence. Shares rose more than 3% in pre-market U.S. trading on Tuesday, reflecting upbeat market sentiment.
The investment banking giant posted earnings per share (EPS) of $1.66 on revenue of $21.44 billion, surpassing analyst forecasts of $21.16 billion.
While net interest income (NII) came in slightly below expectations at $11.95 billion versus a $12.01 billion consensus, Wells Fargo reported robust fee-based income growth, particularly in its investment banking arm.
Strong Fee Income and Credit Performance
Investment banking fees totaled $840 million, well above the estimated $742.8 million, marking a solid recovery in dealmaking activity. The bank also delivered improved credit performance, with provisions for credit losses at $681 million, significantly below the $1.17 billion analysts had expected.
In addition, Wells Fargo achieved its highest loan growth in over three years, with total average loans reaching $928.7 billion — another positive indicator of business momentum.
CEO Highlights Momentum Across Businesses
“The momentum we are building across our businesses drove strong financial results in the third quarter,” said Wells Fargo Chairman and CEO Charlie Scharf.
“Net income and EPS were up from both last year and the previous quarter, supported by higher net interest income and broad-based fee growth.”
Capital Returns and Profitability Metrics
Wells Fargo’s efficiency ratio was 65%, slightly above the 63.6% forecast, while non-interest expenses rose to $13.85 billion versus the expected $13.42 billion. Despite the higher costs, return on equity (ROE) came in at 12.8%, topping the 12% consensus.
The bank also boosted shareholder returns, raising its common stock dividend by 12.5% and repurchasing $6.1 billion worth of shares during the quarter.
Overall, the results underscore Wells Fargo’s strong financial performance and its ability to balance higher costs with robust revenue growth and capital returns.
