Wells Fargo’s financial performance in the fourth quarter fell short of analysts’ expectations, prompting a decline in its stock price prior to the market opening. The bank reported a net interest income of $12.33 billion, reflecting a 4% increase from the previous year. However, this figure was below analysts’ projected income of $12.46 billion.
The bank’s overall profit stood at $5.36 billion, equating to $1.62 per share, for the three months ending December 31. This represented an increase from the $5.08 billion, or $1.43 per share, reported in the same quarter last year. Analysts had anticipated earnings to reach $1.67 per share, indicating a notable discrepancy.
In terms of future projections, Wells Fargo anticipates its interest income to reach approximately $50 billion by 2026, although this figure is slightly lower than analysts’ average expectations of $50.33 billion. Following a strong performance in 2025, where the bank’s stock rose by nearly 33%, shares were down 1.7% before market hours.
The results included $612 million in severance expenses related to job cuts, part of the ongoing restructuring efforts under CEO Charlie Scharf. The bank has continuously downsized its workforce to streamline operations and reduce costs, aiming for greater efficiency and productivity. As of the end of 2025, Wells Fargo employed 205,198 individuals, down from 210,821 employees just a few months earlier.
Wells Fargo has experienced significant regulatory changes in the last year, as a $1.95 trillion asset cap imposed following the fake-accounts scandal was lifted in June. This allows the bank to expand significantly, with total assets surpassing $2 trillion for the first time. Scharf highlighted that investments in infrastructure and business growth were funded through cost-cutting measures, ensuring increased operational efficiency.
Additionally, the bank has successfully closed seven consent orders related to past regulatory issues, although one order from 2018 remains active. Scharf emphasized the role of artificial intelligence in enhancing productivity, suggesting it could lead to further workforce reductions in the ongoing effort to achieve long-term growth.
