Wells Fargo WFC Q3 2023 earnings

Wells Fargo on Friday surpassed Wall Street expectations for third-quarter earnings and revenue as the benefit from higher interest rates offset slowing lending activity.

Shares of the bank rose 3.1% following the report.

Wells Fargo posted earnings per share of $1.48 in the quarter, or $1.39 excluding discrete tax benefits. It was unclear what the exact comparable number was to Wall Street’s expectations, but both figures are higher than the LSEG consensus EPS of $1.24. The earnings are also significantly higher than the 86 cents per share earned in the same quarter a year ago.

Total revenue came to $20.9 billion during the quarter, beating the consensus estimate of $20.1 billion, according to LSEG, formerly known as Refinitiv. Revenue was 6.5% higher than the $19.6 billion recorded in the third quarter of 2022.

“Our revenue growth from a year ago included both higher net interest income and noninterest income as we benefited from higher rates and the investments we are making in our businesses,” Wells CEO Charlie Scharf said in a statement.

“While the economy has continued to be resilient, we are seeing the impact of the slowing economy with loan balances declining and charge-offs continuing to deteriorate modestly,” Scharf added.

Net income rose to $5.77 billion in the three months ended Sept. 30 from $3.59 billion a year earlier, driven by an 8% increase in net interest income.

Wells Fargo said provision for credit losses in the quarter included a $333 million increase in the allowance for credit losses for commercial real estate office loans and higher credit card loan balances.