Wells Fargo (WFC) earnings Q2 2020

A person wears a protective face mask next to Wells Fargo ATMs in Harlem as the city continues Phase 4 of re-opening following restrictions imposed to slow the spread of coronavirus on August 25, 2020 in New York City.

Noam Galai | Getty Images

Wells Fargo reported on Wednesday disappointing earnings for the third quarter as low rates put pressure on the bank’s net interest income.

Here’s how the banking giant’s numbers stacked up against Wall Street expectations:

  • Earnings: 42 cents per share vs. a Refintiv estimate of 45 cents per share
  • Revenue: $18.86 billion vs. $17.978 billion forecast

Shares of Wells Fargo were down 1.7% in the premarket.

“Our third quarter results reflect the impact of aggressive monetary and fiscal stimulus on the US economy,” Wells Fargo CEO Charlie Scharf said in a statement. “Strong mortgage banking fees, higher equity markets, and declining sequential charge-offs positively impacted our results, while historically low interest rates reduced our net interest income and our expenses continued to remain elevated.”

The bank’s net interest income fell by 19% to $9.368 billion from the year-earlier period. That steep decline comes as the Federal Reserve has kept interest rates at historically low levels in response to the coronavirus pandemic.

“The trajectory of the economic recovery remains unclear as the negative impact of COVID continues and further fiscal stimulus is uncertain, but we remain strong with our capital and liquidity levels well above regulatory minimums,” Scharf added.

Wells Fargo shares have been under pressure this year as the company grapples with the economic slowdown sparked by the coronavirus pandemic. Entering Wednesday’s session, Wells is down 54% year to date.

The stock is also lagging shares of rival banks in 2020. JPMorgan Chase is down 27.7% in 2020 and Bank of America has fallen 29.2% in that time period.

Wells is also still reeling from its fake-account scandal in 2016.

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