(Bloomberg) — Wells Fargo & Co.’s expenses fell 12% in the fourth quarter as CEO Charlie Scharf continues to cut staff as part of broader efforts to cut costs and overhaul the bank. The company’s shares rose.
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Noninterest expenses totaled $13.9 billion for the final three months of 2024, even as the bank charged $647 million in severance costs. Net interest income, which topped estimates for the quarter, is expected to rise 1% to 3% this year by the San Francisco-based company, a bigger increase than analysts expected.
“We are only in the early stages of seeing the benefits of the momentum we are building, and our financial performance should continue to benefit from the work we are doing to transform the business,” Scharf said in a statement Wednesday .
Wells Fargo shares were up 5.2% as of 9:49 a.m. in New York and are up 58% over the past 12 months. Stocks largely held on to gains spurred by November’s election results as investors expected President-elect Donald Trump to ease regulations and boost the economy.
Wells Fargo released fourth-quarter big bank results Wednesday alongside rivals JPMorgan Chase & Co., Goldman Sachs Group Inc. and Citigroup Inc. Investors are hungry for details on the impact of the Reserve’s rate cuts federal government on the results of banks, as well as on the results of managers. outlook for the economy and the new Trump administration.
Bank investors hope the rate cuts will help ease the pressure of high funding costs and that firms will be able to lure back borrowers who have been put off by expensive loans.
The fourth-largest U.S. bank is still subject to a Fed-imposed asset cap, limiting it to its size at the end of 2017. The company entered a new phase of its efforts to escape that limit last year when she submitted a third-party review. of its overhauls at the central bank, Bloomberg News reported in September. At the end of the year, Wells Fargo’s total assets were $1.93 trillion.
The company said it expects noninterest expenses for 2025 to be about $54.2 billion, slightly lower than last year’s total.
Scharf said in December that Wells Fargo was still “extremely inefficient” and that cutting costs was like “peeling an onion.” The workforce, which stood at nearly 272,000 people at the end of 2019, rose to 217,502 people at the end of the year.
Efficiency will remain an area of focus in 2025, and Wells Fargo has projected about $2.4 billion in gross savings in its 2025 guidance, Chief Financial Officer Mike Santomassimo said Wednesday in a conference call with journalists. The company has been working to improve efficiency since Scharf took over as CEO in late 2019. The initiatives have generated about $12 billion in gross savings since then, Santomassimo said.
