Wells Fargo shared its second quarter report on Friday, exceeding Wall Street analysts’ expectations on earnings and revenue but disappointing with net interest income decline. The report sent the bank’s stock tumbling more than 7% at one point.
Wells Fargo reported earnings of $1.33 per share versus $1.29, as estimated by analysts. Its revenue also cleared the expected mark of $20.29 billion, coming at $20.69 billion.
However, the bank’s net interest income of $11.92 billion, which indicates how much a company makes through its lending business, was well below the $12.12 billion estimated by analysts. Additionally, it represents a 9% decline compared to the same period in 2023.
According to Wells Fargo CEO Charlie Scharf, the underwhelming net interest income was a result of high interest rates that negatively impacted the company’s funding costs.
“We continued to see growth in our fee-based revenue offsetting an expected decline in net interest income,” said CEO Charlie Scharf in a statement. “The investments we have been making allowed us to take advantage of the market activity in the quarter with strong performance in investment advisory, trading, and investment banking fees.”
After the dip on Friday, Wells Fargo stock traded at around $56 per share. The company’s shares still remain 13.70% up year-to-date.