Wells Fargo Q4 Earnings: Investors Cheer 50% Jump In Net Profit, ROE Improvement, Bank Expects Up To 3% Jump In 2025 NII

On Wednesday, Wells Fargo & Company WFC reported a net income of $5.08 billion, up 47% year over year in the fourth quarter of 2024. The bank reported GAAP EPS of $1.43, beating the consensus of $1.34. 

Revenue remained almost flat at $20.38 billion. Analysts expected $20.59 billion. The U.S. banking giant reported a 7% year-over-year drop in net interest income to $11.84 billion driven by deposit mix and pricing changes, the impact of lower rates on floating rate assets, and lower loan balances, partially offset by lower market funding.

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Noninterest income increased 11% to $8.54 billion, driven by improved results from venture capital investments, an increase in asset-based fees in Wealth and Investment Management on higher market valuations, and higher investment banking fees, as well as increases in most other fee categories, partially offset by net losses on debt securities related to a repositioning of the investment portfolio and lower net gains from trading in Markets business.

Investment advisory fees and brokerage commissions were up $413 million, or 15% year-over-year, driven by higher asset-based fees reflecting higher market valuations. Net interest margin fell from 2.92% a year ago to 2.70% in the fourth quarter of 2024.

Average loans were down $31.6 billion, or 3%, year-over-year due to declines in commercial real estate, and residential mortgage loans were partially offset by higher commercial and industrial loans and credit card loans.

Average deposits were up $12.9 billion, or 1%, year over year, as growth in customer deposits was partially offset by a reduction in higher-cost CDs issued by Corporate Treasury.

The book value per share grew 6% YoY to $48.85 compared to $46.25 last year. The Return on average equity ratio in Q4 improved to 11.70 compared to 7.6 last year.

Guidance: For fiscal year 2025, Wells Fargo expects net interest income to be ~1 to 3% higher than 2024 net interest income of $47.7 billion, down 9% year over year.

Average loans (4Q25 vs. 4Q24) are expected to grow modestly due to anticipated growth in Corporate and Investment Banking Markets and Banking and auto and credit card sales.

Average deposits in all operating segments are expected to grow modestly, which should reduce the need for higher-cost market funding.

Price Action: At the last check on Wednesday, WFC stock was up 4.66% to $74.51 during the premarket session.

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