European Investor
13 Oct 2026, 15:19
Wells Fargo Falls 1% Despite Higher Q3 Earnings as Credit Costs Rise
Wells Fargo (NYSE: WFC) shares fell about 1% after the bank reported third-quarter 2026 net income of $6.0 billion, or $1.87 per diluted share, up from $5.6 billion, or $1.66 per share, a year earlier.
Revenue increased modestly to $21.87 billion from $21.44 billion, while noninterest expense declined slightly to $13.74 billion. Return on equity improved to 13.8% from 12.8%, and return on tangible common equity rose to 16.3% from 15.2%.
Loan and deposit growth remained strong. Average loans increased 11% year over year to $1.03 trillion, while average deposits rose 11% to $1.48 trillion. Growth was broad-based across Consumer Banking and Lending, Commercial Banking, Corporate and Investment Banking, and Wealth and Investment Management.
Business trends were also solid. Wealth and Investment Management revenue increased 12%, Commercial Banking rose 6%, Consumer Banking and Lending grew 5%, and Corporate and Investment Banking revenue increased 3%. Within CIB, Banking revenue rose 8%, M&A revenue increased 30%, and both equity capital markets and investment-grade underwriting fees climbed 33%. Equities revenue was up 21%.
The main negative was credit costs. Provision for credit losses increased to $1.03 billion from $681 million a year earlier, indicating a more cautious reserve posture despite management saying delinquencies and business losses remain low.
Wells Fargo also returned capital aggressively, repurchasing 28.6 million shares for $2.5 billion during the quarter.
The 1% decline in the stock appears to reflect investor focus on higher credit provisions and a lower CET1 ratio of 10.0% versus 11.0% a year ago, partially offsetting the benefits of stronger earnings, loan growth and improved returns.
Wells Fargo (NYSE: WFC) shares fell about 1% after the bank reported third-quarter 2026 net income of $6.0 billion, or $1.87 per diluted share, up from $5.6 billion, or $1.66 per share, a year earlier.
Revenue increased modestly to $21.87 billion from $21.44 billion, while noninterest expense declined slightly to $13.74 billion. Return on equity improved to 13.8% from 12.8%, and return on tangible common equity rose to 16.3% from 15.2%.
Loan and deposit growth remained strong. Average loans increased 11% year over year to $1.03 trillion, while average deposits rose 11% to $1.48 trillion. Growth was broad-based across Consumer Banking and Lending, Commercial Banking, Corporate and Investment Banking, and Wealth and Investment Management.
Business trends were also solid. Wealth and Investment Management revenue increased 12%, Commercial Banking rose 6%, Consumer Banking and Lending grew 5%, and Corporate and Investment Banking revenue increased 3%. Within CIB, Banking revenue rose 8%, M&A revenue increased 30%, and both equity capital markets and investment-grade underwriting fees climbed 33%. Equities revenue was up 21%.
The main negative was credit costs. Provision for credit losses increased to $1.03 billion from $681 million a year earlier, indicating a more cautious reserve posture despite management saying delinquencies and business losses remain low.
Wells Fargo also returned capital aggressively, repurchasing 28.6 million shares for $2.5 billion during the quarter.
The 1% decline in the stock appears to reflect investor focus on higher credit provisions and a lower CET1 ratio of 10.0% versus 11.0% a year ago, partially offsetting the benefits of stronger earnings, loan growth and improved returns.
