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Wells Fargo Beats Second-Quarter Estimates Amid Broad-Based Revenue Growth

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Wells Fargo Beats Second-Quarter Estimates Amid Broad-Based Revenue Growth

Wells Fargo (WFC) joined other Wall Street banks that reported above-consensus second-quarter results on Tuesday amid broad-based revenue growth, while Chief Executive Charlie Scharf said consumers and businesses remain "very strong" despite inflation concerns.

The lender posted earnings of $2 a share for the June quarter, up from $1.60 a year ago and surpassing the FactSet-polled consensus of $1.72. Overall revenue increased 9% to $22.62 billion, topping the Street's view for $21.86 billion.

Net interest income rose 5% to $12.32 billion, while noninterest income climbed 13% to $10.31 billion.

All of Wells Fargo's operating segments generated strong revenue growth, Scharf said in an earnings release. "We are clearly benefitting from the broad-based economic strength we see in the US, but the investments we are making and our improved operating discipline also drove strong momentum in our key business metrics across all operating segments again this quarter," he said.

Wells Fargo's corporate and investment banking revenue climbed 16% to $5.43 billion, buoyed by gains of 20% and 36% in lending and investment banking, respectively. Markets revenue increased 24% from a year ago.

JPMorgan Chase (JPM), Bank of America (BAC), Goldman Sachs (GS) and Citigroup (C) beat second-quarter expectation Tuesday, driven by a surge in markets revenue and investment banking fees.

BofA Securities said last week that major US banks could top second-quarter earnings expectations amid gains from capital markets activity.

"Consumer spending is higher, charge-offs and delinquencies are lower, and savings and investments are growing across consumer segments," Scharf said. "Equity indices are at or near all-time highs, credit spreads are narrow, and there is a significant amount of liquidity being deployed by banks and non-banks. Concerns around affordability and inflation exist, but the labor market and wage growth remain strong."

These favorable conditions won't persist forever "so we are being selective about how much and where to grow," Scharf said.

Revenue in Wells Fargo's consumer banking and lending segment added 6% to $10.29 billion, while commercial banking revenue rose by the same percentage to $3.12 billion. The wealth and investment management division logged growth of 13% to $3.89 billion.

The lender continues to project net interest income of about $50 billion for 2026, it said in an earnings presentation.

Price: $88.19, Change: $+0.52, Percent Change: +0.59%

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