(Bloomberg) – Wells Fargo & Co.’s fourth-quarter expenses rose to a fourth-quarter as Chief Executive Officer Charlie Scharf continues to cut jobs as part of a broader effort to cut costs and rebuild the bank. It fell 12% in the quarter. The company's stock rose.
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Non-interest expenses amounted to $13.9 billion in the final three months of 2024, even though the bank took on $647 million in severance payments. Net interest income beat expectations for the quarter, with the San Francisco-based company expecting it to rise between 1% and 3% this year, a larger increase than analysts expected.
“We are still in the early stages of realizing the benefits of the momentum we are building, and our financial performance should continue to benefit from our transformation efforts,” Scharf said in a statement Wednesday. said.
Wells Fargo shares were up 5.2% as of 9:49 a.m. New York and have risen 58% in the past 12 months. Stocks have largely maintained the gains boosted by November's election results, as investors hope President-elect Donald Trump will ease regulations and stimulate the economy.
Wells Fargo & Co. on Wednesday joined rivals JPMorgan Chase & Co., Goldman Sachs Group Inc. and Citigroup Inc. in announcing fourth-quarter results for major banks. Investors want to know more about how the Federal Reserve's interest rate cuts have affected bank performance and executives' performance. Outlook for the economy and the next Trump administration.
Bank investors hope that lower interest rates will ease pressure on high funding costs and allow banks to lure back borrowers who have been deterred by expensive loans.
The fourth-largest U.S. bank remains under asset limits imposed by the Federal Reserve, limiting it to its size at the end of 2017. Last year, the company filed for an independent review, entering a new phase in its efforts to circumvent the restrictions. Bloomberg News reported on the central bank review in September. At year-end, Wells Fargo's total assets were $1.93 trillion.
The company said it expects non-interest expenses to be approximately $54.2 billion in 2025, slightly lower than last year's total.
Mr. Scharf said in December that Wells Fargo remains “extremely inefficient” and that cutting costs would be “like peeling an onion.” The number of employees was approximately 272,000 at the end of 2019, but it was 217,502 at the end of the year.
Efficiency will continue to be a focus area in 2025, with Wells Fargo factoring approximately $2.4 billion in total savings into its 2025 outlook, Chief Financial Officer Mike Santomassimo told reporters Wednesday. said in a conference call. The company has been working to improve efficiency since Schaaf took over as CEO at the end of 2019. Since then, the initiative has resulted in total savings of about $12 billion, Santomassimo said.
