Wells Fargo & Company (NYSE:WFC) reported fourth-quarter revenue and earnings that came in ahead of expectations as it benefited from the strong economic environment and high interest rates.
However, the lender warned that net interest income could fall by 7% to 9% in 2024 as interest rates start to decline.
Revenue for the quarter ended December 31, 2023 rose 2.2% to $20.5 billion. Net interest income for the quarter declined 4.9% to $12.8 billion from a year earlier. For the year, it was up 17% at $55.4 billion.
It reported a 9.2% improvement in net income to $3.45 billion. That resulted in diluted earnings per share of $0.86, up 15% from a year earlier.
Like the other large US banks, it faced a notable additional expense of $1.9 billion associated with a Federal Deposit Insurance Corporation (FDIC) assessment following the small banks’ crisis of early 2023.
“As we look forward, our business performance remains sensitive to interest rates and the health of the US economy, but we are confident that the actions we are taking will drive stronger returns over the cycle,” CEO Charlie Scharf commented in a statement.
“We are closely monitoring credit and while we see modest deterioration, it remains consistent with our expectations. Our capital position remains strong and returning excess capital to shareholders remains a priority.”
Ahead of the opening bell, the bank’s shares were down 2% at $48.07.