Wells Fargo has reported a net income of $4.9bn for the first quarter of 2025 (Q1 2025) ended 31 March 2025, translating to $1.39 per diluted share.
The Q1 2025 profit represents a 6% rise from the $4.6bn reported in the same period last year.
The bank’s total revenue for the quarter fell to $20.1bn, down 3% from $20.8bn recorded in Q1 2024.
Wells Fargo experienced a 6% decline in net interest income during the quarter. This was primarily due to the effects of reduced interest rates on floating rate assets, changes in deposit mix and pricing, lower loan balances, and one fewer day in the quarter.
However, these declines were partially offset by decreased market funding costs.
Noninterest income remained steady, with gains from the sale of the commercial non-agency third-party servicing business and increased asset-based fees in wealth and investment management. These gains were partially counterbalanced by lower results from venture capital investments and higher net losses on debt securities.
Operating expenses saw a 3% drop, attributed to reduced operating losses and decreased Federal Deposit Insurance Corporation assessments. In contrast, expenses related to revenue-driven compensation increased, particularly within wealth and investment management, alongside higher technology and equipment costs.
The provision for credit losses showed a reduction in allowance for commercial real estate loans due to lower loan balances, which was slightly mitigated by an increased allowance for commercial and industrial loans. First-quarter tax expense included $313m in discrete tax benefits tied to resolving prior period issues.
In segment performance, consumer banking and lending faced a 2% revenue decrease due to higher deposit costs, although credit card revenue rose by 2%. The commercial banking sector saw a 7% revenue dip from decreased net interest income but noted an 8% rise in noninterest income driven by higher treasury management fees.
Corporate and investment banking recorded a 2% revenue increase despite a 4% decline in banking services, supported by an 18% gain in commercial real estate owing to asset sales and increased market activity. Noninterest expenses rose by 6% related to incentives.
Wealth and investment management’s revenue rose by 4%, bolstered by higher asset-based fees on improved market valuations, though net interest income dipped by 5%. Noninterest expenses increased due to compensation but were partly eased by efficiency measures.
Lastly, the corporate segment saw a revenue fall due to lower results from venture capital investments and higher net losses on debt securities.
Wells Fargo CEO Charlie Scharf said: “We produced solid results with diluted earnings per share increasing 16% from a year ago reflecting fee-based revenue growth across many of our core businesses, continued expense discipline, improved credit results, and an 8% reduction in diluted common shares as we continued to return capital to shareholders.”
