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Key Highlights:
- Wells Fargo’s Q1 net income rose 6% to $4.89 billion, or $1.39 per share, beating expectations.
- Fee income from investment banking and wealth management offset tariff-driven uncertainty.
- CEO Charlie Scharf warned U.S. tariffs could slow economic growth in 2025.
- Credit quality remained solid, with lower provisions for loan losses.
April 11, 2025 – SAN FRANCISCO – Wells Fargo & Co. reported a 6% rise in first-quarter profit, bolstered by higher fees in wealth management and investment banking, even as CEO Charlie Scharf cautioned that rising U.S. tariffs could weigh heavily on the economic outlook for the remainder of the year.
The fourth-largest U.S. bank posted net income of $4.89 billion, or $1.39 per share, compared to $4.62 billion, or $1.20 per share, a year earlier. Analysts had anticipated $1.33 per share, making this a notable beat despite increasing geopolitical and macroeconomic volatility.
Shares of the bank rose 2% in premarket trading, though the stock remains down 10% year-to-date.
Tariffs Could Disrupt Growth Trajectory
While U.S. banks began the year with strong momentum driven by a resilient economy and a burst of dealmaking, the optimism has been dented by President Donald Trump’s erratic trade policies. The administration’s latest move to ratchet up tariffs has stoked concerns around inflation and a possible recession.
“We support the administration’s willingness to look at barriers to fair trade… though there are certainly risks associated with such significant actions,” Scharf said in a statement.
“We are prepared for a slower economic environment in 2025, but the actual outcome will depend on the results and timing of the policy changes.”
This uncertainty prompted a cautious tone from the bank, even as it reiterated its annual interest income forecast.
Strong Fee Income Supports Results
Wells Fargo’s revenue mix benefited from a 24% rise in investment banking fees, which jumped to $775 million due to increased activity in debt capital markets.
The bank advised on notable deals such as Blackstone’s $5.65 billion acquisition of Safe Harbor Marinas and Fubo’s merger with Disney’s Hulu + Live TV segment. While overall M&A activity slowed amid trade tensions, debt issuance surged as companies rushed to lock in favorable terms before further policy changes.
On the retail and advisory side, wealth management also saw solid gains, contributing to the bank’s fee income growth.
Operational Efficiency and Credit Strength
In line with its ongoing transformation strategy, Wells Fargo continued to cut costs and invest in technology to streamline operations. The bank’s expenses fell 3% year-over-year to $13.89 billion.
Additionally, the lender’s provision for credit losses dipped slightly to $932 million, indicating stable credit quality despite macroeconomic headwinds. Analysts had feared that rising tariffs could lead to higher borrower stress, but for now, loan performance remains strong.
The bank also continued to reduce headcount as part of a broader cost-saving initiative and focused on resolving longstanding regulatory issues.
Looking Ahead
Despite the solid quarter, Wells Fargo’s outlook is clouded by the uncertain trajectory of U.S. trade policy, particularly with China. The bank appears well-capitalized and operationally efficient, but the risk of economic slowdown remains high if tariff tensions escalate further.
Analysts note that continued strength in interest income and selective investment banking opportunities could support earnings in the near term, though volatility in global trade could temper growth prospects.
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