Wells Fargo Q3 Earnings Beat Despite Revenue Drop

Wells Fargo reported a decline in third-quarter earnings and revenue, with net income falling to $5.11 billion from $5.78 billion a year ago, although it surpassed analysts' expectations of $5.11 billion. The bank's revenue dropped 2% to $20.37 billion, and net interest income decreased by 11% to $11.69 billion due to higher funding costs and reduced loan demand as customers migrated to higher-yielding deposit products. Despite these challenges, Wells Fargo beat earnings estimates, reporting $1.52 per share compared to the expected $1.28, largely due to strategic investments and lower provisions for credit losses. The company faces ongoing regulatory scrutiny and an asset cap imposed by the Federal Reserve, limiting its growth potential until compliance improvements are verified. Shares of Wells Fargo rose nearly 6% following the earnings announcement, although interest income is expected to decline further in 2024 as the Federal Reserve continues to cut rates.