Wells Fargo (NYSE:WFC) shares jumped 3% in pre-market Friday after the company reported better-than-expected Q2 numbers.
Wells Fargo reported EPS of $1.25, beating the average analyst estimate of $1.18. Revenue for the quarter came in at $20.53 billion versus the consensus estimate of $20.1B.
Net interest income (NII) increased 29% to $13.16B. The CET1 ratio came in at 10.7%
“Our strong net interest income continued to benefit from higher interest rates, and we remained focused on controlling expenses. As expected, net loan charge-offs increased from the first quarter. Consumer charge-offs continued to deteriorate modestly. Commercial charge-offs increased driven by a small number of borrowers in Commercial Banking, with little signs of systemic weakness across the portfolio, and higher losses in commercial real estate, primarily in the office portfolio,” said Chief Executive Officer Charlie Scharf.
“While we haven’t seen significant losses in our office portfolio to-date, we are reserving for the weakness that we expect to play out in that market over time.”
The bank also bought back $4B of its stock in Q2.
“Our company remains strong and we have significant opportunities to continue to improve how we serve our customers. The U.S. economy continues to perform better than many had expected, and although there will likely be continued economic slowing and uncertainty remains, it is quite possible the range of scenarios will narrow over the next few quarters. We remain prepared for a variety of scenarios and our steadfast commitment to our risk and control buildout coupled with our continued focus on financial and credit risk management allows us to support our customers throughout economic cycles,” Scharf concluded.