Wells Fargo's profit falls on lower interest income
Repeats with no change to text, headline
Oct 11 (Reuters) -Wells Fargo's WFC.N profit fell in the third quarter as the bank's interest income was squeezed by subdued loan demand and higher payments to depositors.
The fourth-largest U.S. lender reported net income of $5.11 billion for the three months ended Sept. 30, compared with $5.78 billion a year earlier, it said on Friday.
Wells Fargo's net interest income -- or the difference between what it earns on loans and pays out for deposits -- dropped 11% to $11.69 billion in the third quarter.
Analysts on average had predicted $11.87 billion, according to estimates compiled by LSEG.
Banks' interest income, which had benefited in recent years as the Federal Reserve raised interest rates, is expected to keep declining for the rest of 2024.
The U.S. central bank last month loweredits benchmark policy rate for the first time since 2020, cutting it by 50 basis points. Policymakers have projected another half of a percentage point reduction by the end of this year.
The rate cut was followed by top banks lowering prime lending rates, which will likely shrink their interest income. Banks have also tightened lending standards this year.
Several factors could also weigh on bank profits in the coming months. Loan demand has been subdued as higher interest rates deterred commercial and consumer borrowers. At the same time, banks have had to compete for deposits by paying clients more.
Wells Fargo is also reportedly doubling down on efforts to lift a $1.95 trillion asset cap imposed by the Federal Reserve that prevents the bank from growing until regulators deem it has fixed problems dating back to the 2016 fake accounts scandal.
In September, a U.S. banking regulator found its safeguards against money laundering and other illegal transactions were too lax and restricted its ability to expand in risky businesses.
The asset cap curtails Wells Fargo's ability to take in more deposits and expand its trading business, two potential growth areas for the bank, CEO Charlie Scharf said earlier this year.
It still has eight regulatory punishments, called consent orders, that it is working to address.
On a per share basis, quarterly profit was $1.42 versus $1.48 a year earlier.
Reporting by Manya Saini and Noor Zainab Hussain in Bengaluru and Saeed Azhar in New York; Editing by Lananh Nguyen and Sriraj Kalluvila
免责声明: XM Group仅提供在线交易平台的执行服务和访问权限，并允许个人查看和/或使用网站或网站所提供的内容，但无意进行任何更改或扩展，也不会更改或扩展其服务和访问权限。所有访问和使用权限，将受下列条款与条例约束：(i) 条款与条例；(ii) 风险提示；以及(iii) 完整免责声明。请注意，网站所提供的所有讯息，仅限一般资讯用途。此外，XM所有在线交易平台的内容并不构成，也不能被用于任何未经授权的金融市场交易邀约和/或邀请。金融市场交易对于您的投资资本含有重大风险。
所有在线交易平台所发布的资料，仅适用于教育/资讯类用途，不包含也不应被视为用于金融、投资税或交易相关咨询和建议，或是交易价格纪录，或是任何金融商品或非应邀途径的金融相关优惠的交易邀约或邀请。
本网站上由XM和第三方供应商所提供的所有内容，包括意见、新闻、研究、分析、价格、其他资讯和第三方网站链接，皆保持不变，并作为一般市场评论所提供，而非投资性建议。所有在线交易平台所发布的资料，仅适用于教育/资讯类用途，不包含也不应被视为适用于金融、投资税或交易相关咨询和建议，或是交易价格纪录，或是任何金融商品或非应邀途径的金融相关优惠的交易邀约或邀请。请确保您已阅读并完全理解，XM非独立投资研究提示和风险提示相关资讯，更多详情请点击 这里。
