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Wells Fargo NII Declines in First Quarter, Expectations Down for the Year

In U.S. bank Wells Fargo’s January-March (first quarter) results, net interest income (NII) was lower than market expectations. Loan growth was weak and pressure to raise deposit rates increased, canceling out the benefits of higher interest rates.

According to the announcement on the 12th, NII for the January-March period decreased 8.3% from the same period last year to $12.2 billion (approximately 1.87 trillion yen). This was slightly lower than the $12.3 billion expected by analysts. On the other hand, investment advisory income and brokerage fees increased, and overall income exceeded expectations.

Wells Fargo said the decline in NII in the January-March period was due to higher interest rates impacting funding costs, including customers moving their funds to higher-yielding accounts and lower loan balances. Full-year NII is expected to decline 7% to 9% from the 2023 result of $52.4 billion, maintaining the forecast given in January.

Total deposits increased slightly in the January-March period compared to the same period last year. This was supported by a rapid increase in interest-bearing deposits. Interest-free deposits decreased by 18%.

The bank also recorded net charge-offs of $1.15 billion. This includes $187 million related to commercial real estate.

Net Interest Income on the Decline

NII missed expectations in first quarter, expected to be down this year

Source: Company filing

Original title:Wells Fargo NII Misses Estimates as Depositor Pressure Grows (2)(excerpt)

(Adds and updates the third and subsequent paragraphs)

2024-04-12 11:41:08
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