Wells Fargo (NYSE:WFC) initially dived on its stock price Tuesday, after the bank beat second-quarter profit estimates on Tuesday but cut its 2025 guidance for net interest income.
The bank expects its interest income to be roughly in line with the 2024 level of $47.7 billion. In April, it said NII growth would be at the low end of the 1% to 3% range.
Wells Fargo said lower interest income in its markets business led to the NII forecast cut. Analysts and investors were skeptical about its ability to meet its interest income targets after a slow start to 2025.
“While there continue to be risks..., activity levels have remained consistent and our strong credit performance continues to point to the strength of our commercial and consumer customers’ financial position,” CEO Charlie Scharf said in a statement.
The bank had expected its NII, or the difference between what it earns on loans and pays out on deposits, to be relatively stable in the first half of 2025, with more growth in the second half.
Heading into the results, some analysts expected the bank to cut its NII forecast as elevated interest rates weighed on demand from borrowers.
WFC shares dipped three dollars, or 3.6%, to open Tuesday at $80.43.
