Wells Fargo’s Interest Income Won’t Meet Estimates, CEO Says
(Bloomberg) -- Wells Fargo & Co.’s Tim Sloan warned investors that the firm’s net interest income would be less than analysts are predicting, and shares of the company dropped the most in more than a month.
Fourth-quarter NII will be flat compared with the previous three months, when the bank collected $12.6 billion in interest, the chief executive officer said Tuesday at an investor conference hosted by Goldman Sachs Group Inc. Analysts had been forecasting a figure closer to $12.8 billion.
Wells Fargo dropped 1.7 percent to $53.32 at 10:05 a.m., the biggest decline since Oct. 24. The shares have fallen 12 percent this year, compared with the 4.9 percent decrease for the 67-company S&P 500 Financials Index.
Sloan said the bank expects an overall increase in loan balances based on higher commercial loans and customers borrowing more on their credit cards. He also affirmed that the company is on track to achieve its goal of trimming costs to a range of $53.5 billion to $54.5 billion for the year.
“What they’re pushing is what’s in their control, and that’s the expense reduction,” Charles Peabody, an analyst at Portales Partners, said in a telephone interview. “And what’s being avoided in their conversation is what’s happening to the revenues side of the equation.”
©2018 Bloomberg L.P.