(Reuters) – Wells Fargo beat expectations in the third quarter as the strength of its wealth management business and lower provisions supported its performance, the group said on Friday.
The fourth American bank nevertheless forecast a larger than expected drop in its net interest income (RNI) in 2024, of 9%, when Wall Street anticipated a decline of 8.4%.
On the New York Stock Exchange, the stock gained 3.5% in pre-market trading.
Quarterly earnings per share beat expectations at $1.52, versus the consensus of $1.28.
RNI, the difference between what Wells Fargo pays for deposits and what it earns on loans, fell 11% to $11.69 billion (10.69 billion euros) in the third quarter. Analysts were expecting $11.87 billion in an LSEG consensus.
“Our work on risk and control remains our top priority,” Chief Executive Officer Charlie Scharf said in a statement.
“Credit performance was in line with our expectations, commercial loan demand remained tepid, we saw growth in deposit balances across all our businesses,” he added.
Bank interest income, which has been supported by the Fed’s high interest rates, is expected to continue to decline through the end of 2024 amid monetary easing.
JPMorgan Chase, which also published its third quarter results on Friday, reported a drop in its profit with the increase in provisions for credit default.
(Reporting Manya Saini and Noor Zainab Hussain in Bangalore and Saeed Azhar in New York; Augustin Turpin, editing by Kate Entringer)
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