Wells Fargo (NYSE:WFC) reported Q2 EPS of $0.74, $0.11 worse than the analyst estimate of $0.85. Revenue for the quarter came in at $17.03 billion versus the consensus estimate of $17.62 billion.
Chief Executive Officer Charlie Scharf commented, “While our net income declined in the second quarter, our underlying results reflected our improving earnings capacity with expenses declining and rising interest rates driving strong net interest income growth. Loan balances increased with growth in both consumer and commercial loans. Credit quality remained strong, and we continued to execute on our efficiency initiatives. Noninterest income declined as higher interest rates and weaker financial markets reduced our venture capital, mortgage banking, investment banking, and brokerage advisory results.”
“Our work to build an appropriate risk and control infrastructure is ongoing and remains our top priority, but we also continue to invest in our businesses to better serve our customers and to help drive growth. This week we launched our fourth new credit card offering in the past year, Wells Fargo AutographSM, reflecting our momentum in growing our consumer credit card business. In addition, as part of our effort to provide a more differentiated experience to our affluent customers, we began the roll out of Wells Fargo Premier, which we will continue to build on in future quarters. We have also continued to invest in our digital capabilities including the relaunch of Intuitive Investor®, our digitally automated investing platform,” Scharf continued.
“Looking ahead, our results should continue to benefit from the rising interest rate environment with growth in net interest income expected to more than offset any further near-term pressure on noninterest income. We do expect credit losses to increase from these incredibly low levels, but we have yet to see any meaningful deterioration in either our consumer or commercial portfolios. Our efficiency initiatives continue to be on track, and the recent Federal Reserve stress test confirmed our strong capital position and our capacity to return excess capital to shareholders through dividends and common stock repurchases,” Scharf concluded.