Wells Fargo (NYSE:WFC) released better-than-expected Q2 results on Friday. The company reported EPS of $1.25, surpassing the Street estimate of $1.18. The revenue for the quarter amounted to $20.53 billion, exceeding the Street estimate of $20.1 billion.
The net interest income (NII) demonstrated a significant increase of 29%, reaching $13.16 billion. The Common Equity Tier 1 (CET1) ratio stood at 10.7%.
CEO Charlie Scharf acknowledged the positive impact of higher interest rates on the company’s strong net interest income and emphasized their focus on expense management. Scharf also noted that net loan charge-offs had risen compared to the previous quarter, with consumer charge-offs deteriorating slightly. In Commercial Banking, charge-offs increased due to a small number of borrowers, but there were no signs of systemic weakness across the portfolio.
Additionally, losses in commercial real estate, particularly in the office portfolio, contributed to the increase in charge-offs. Scharf stated that although significant losses had not been observed in the office portfolio so far, they are reserving for the anticipated market weakness in that sector over time.