Wells Fargo reported third-quarter net income of $5.951 billion, up 6% from $5.589 billion a year earlier. Diluted earnings per share increased to $1.87 from $1.66. Revenue rose 2% to $21.870 billion from $21.436 billion.
Net interest income increased 5% to $12.517 billion as the bank expanded its balance sheet following removal of its regulatory asset cap. Average loans grew 11% to $1.0334 trillion and average deposits rose 11% to $1.4829 trillion. The common equity Tier 1 ratio was 10.0% at quarter-end.
LOAN GROWTH LIFTED INTEREST INCOME
The larger loan book supported higher net interest income, although Reuters reported that the figure fell short of market expectations. The bank said lower rates on floating-rate assets, higher deposit costs and fewer non-interest-bearing deposits constrained the result.
Credit-loss provisions increased to $1.029 billion from $681 million a year earlier as Wells Fargo reserved against its expanding loan portfolio. Reuters reported that the bank had not observed deterioration in delinquency trends, separating the reserve increase from evidence of a current broad credit downturn.
CAPITAL AND CREDIT COSTS SHAPE THE OUTLOOK
Wells Fargo maintained a 10.0% common equity Tier 1 ratio while growing both loans and deposits at double-digit rates. Investment banking revenue rose 10% to $611 million, but overall revenue still missed the market consensus reported by Reuters.
The result shows the earnings benefit and risk cost of faster balance-sheet expansion after the asset cap was lifted. The next quarterly disclosure will be watched for whether loan growth continues, net interest income meets market expectations and provisions stabilise without deterioration in borrower performance.