Wells Fargo predicts "continued volatility" after mixed first quarter
2025-04-11 11:26
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(Alliance News) - Wells Fargo & Co on Friday said it is prepared for a "slower economic environment in
2025" as it urged a "timely resolution" to the global trade dispute.
The San Francisco-based lender made the comments as it unveiled mixed first quarter results.
Diluted earnings per share rose 16% to USD1.39 in the three months to March 31 from USD1.20 a year prior, beating the USD1.28 consensus.
Net income rose 5.8% to USD4.89 billion from USD4.62 billion a year prior, but total revenue fell to USD20.15 billion from USD20.86 billion, missing the USD20.75 billion consensus.
Net interest income fell to USD11.50 billion from USD12.22 billion a year prior, missing the consensus of USD11.81 billion.
The drop in net interest income was driven by the impact of lower interest rates on floating rate assets, deposit mix and pricing changes, lower loan balances, and one fewer day in the quarter, partially offset by lower market funding.
Non-interest income was stable with an increase in asset-based fees in Wealth & Investment Management, and higher investment banking fees, partially offset by lower results from venture capital investments, higher net losses on debt securities and lower net gains from trading in the Markets business.
Chief Executive Charlie Scharf said the "solid" results reflected "fee-based revenue growth across many of our core businesses, continued expense discipline, improved credit results, and an 8% reduction in diluted common shares as we continued to return capital to shareholders."
The bank repurchased USD3.5 billion worth of common stock in the quarter, it said.
Scharf said the bank supported the Trump administration's "look at barriers to fair trade" for the US, "though there are certainly risks associated with such significant actions."
"Timely resolution which benefits the US would be good for businesses, consumers, and the markets," he added.
Scharf predicted "continued volatility and uncertainty", noting the bank is prepared for a "slower economic environment in 2025".
He said the actual outcome will be dependent on the results and timing of the policy changes.
In the quarter, return on equity picked up to 11.5% from 10.5% a year ago, while the return on average tangible common equity improved to 13.6% from 12.3%. The CET1 ratio was broadly stable at 11.1% compared with 11.2% a year ago.
Shares in Wells Fargo were 1.7% higher in pre-market trading. They closed down 4.9% at USD63.11 on Thursday.
By Jeremy Cutler, Alliance News reporter
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