Wells Fargo & Co (NYSE:WFC, ETR:NWT) faced a setback in its first quarter as it missed estimates for net interest income (NII), signaling challenges amid muted loan growth and increased deposit payouts.
The firm reported $12.2 billion in NII, down 8.3% from the previous year and slightly below analysts' expectations.
However, overall revenue of $20.86 billion exceeded estimates of $20.18 billion, driven by growth in investment advisory fees and brokerage commissions.
CEO Charlie Scharf attributed the revenue increase to investments across the franchise.
The results reflect broader industry trends, with big banks like JPMorgan Chase & Co (NYSE:JPM, ETR:CMC). also reporting NII slightly below expectations.
While commercial banking revenue fell slightly below estimates, corporate and investment banking revenue exceeded expectations. Consumer banking and lending revenue fell short, highlighting challenges in that segment.
Despite the NII miss, Wells Fargo reported adjusted earnings per share of $1.20, surpassing analysts' estimates.
Shares of Wells Fargo fell nearly 2.5% in pre-market trading following the softer-than-expected NII figures but recovered slightly by market open Friday to trade close to its Thursday close at $56.62.