Wells Fargo (WFC) Q3 2026 earnings review
Wells Fargo's profit per share rises, but revenue barely moves
Wells Fargo, the big US bank, earned more per share even though its total revenue hardly moved. Revenue rose 2% from a year ago, while profit per share climbed 13%. Chief executive Charlie Scharf called the growth broad-based, but by our math a tax benefit and a smaller share count supplied most of it.
| Revenue | $21.87B +2% from a year ago; +9% last quarter |
|---|---|
| Profit per share | $1.87 +13% from a year ago; about +5% excluding one-offs, by our math |
| Net interest margin | 2.43% unchanged from last quarter; 2.61% a year ago |
| Full-year outlook | Not restated in the release July plan: about $50B of net interest income; by our math that leaves $13.1B for Q4 |
⚖️ Verdict: 🔴 Bearish
The story got worse because trading and corporate lending, which drove this year's expansion, both shrank from last quarter. The main capital ratio dropped to 10.0%, the bottom of the bank's target range. One comfort: the lending margin held at 2.43% after a year of declines.
The question now is whether lending and trading paused for one quarter or have stopped growing. A pause keeps the July plan of about $50 billion of net interest income within reach, and a stop does not. Fourth-quarter results will tell: by our math the plan needs net interest income about 4% above this quarter's.
🐂 Bull Case
The Lending Margin Stopped Falling
Net interest margin is what a bank earns on loans and securities, minus what it pays for funding, as a share of those assets. Wells Fargo's margin had dropped for a year as low-margin trading balances and interest-paying deposits grew. In July, management told investors to expect another small decline.
The margin held at 2.43% instead. Loans earned 5.65%, slightly above last quarter, and that offset a second straight rise in what the bank pays depositors. So more of each new loan dollar now reaches interest income.
What to watch: the margin in the fourth quarter, due in January. A second flat reading would show that the decline has ended and has not just paused for one quarter.
Consumer Bank Profit Rose 21%
Consumer Banking and Lending is the branch business: checking accounts, cards, mortgages and car loans for households and small firms. It brings in almost half of Wells Fargo's revenue, so its results matter most to the group.
Profit there climbed 21% from a year ago, to $2.8 billion. Revenue grew while costs shrank, and the unit set aside less for bad loans than in the spring.
- Revenue: up 5%, to $10.7 billion
- Checking, savings and small-business banking: up 7%, on higher deposit balances and fees
- Car loans: revenue up 33%, on higher balances and wider loan spreads
- Mortgages: revenue down 15%
- Costs: down 3%
This matters because the business does not depend on trading conditions. Chief executive Charlie Scharf said the bank opened more than 660,000 credit card accounts in the quarter. New card accounts cost money first and earn interest later, so today's openings should support revenue in coming years.
What to watch: card revenue next quarter, which rose only 3% this time despite a year of heavy account openings. Faster card revenue would show that the new accounts have started to pay.
Wealth and Deal Fees Grew at Double-Digit Rates
Two fee businesses kept expanding. Wealth and Investment Management, which advises affluent clients and runs their portfolios, lifted revenue 12%. The investment banking desk, which arranges share sales, bond sales and mergers for companies, brought in 10% more.
- Client assets: $2.74 trillion, up 11%
- Fees for managing client money, across the bank: up 15%
- Merger advice revenue: up 30%, chief executive Charlie Scharf said
One caution sits inside the wealth number. Wells Fargo said the fee gain was "driven by an increase in market valuations", so rising markets did the work, not new client money. Those fees follow markets down as well as up.
What to watch: client assets at the end of December. The bank has said it sets most advisory fees from asset values at the start of each quarter, so that figure shapes fees in early 2027.
Costs Fell While Technology Spending Rose
"Expenses declined from a year ago even though revenue-related expenses increased 15%," chief executive Charlie Scharf said. Total costs did drop 1%, helped by what the release calls "an 8% reduction in headcount". Wells Fargo ended September with 194,369 employees.
- Staff costs: 40.0% of revenue, down 2.1 percentage points
- Technology and equipment: 6.8% of revenue, up 0.7 point
- Costs per dollar of revenue: 63 cents, against 65 a year ago
The saving is smaller than it looks, because last year's quarter included $296 million of severance. Without that charge, costs rose about 1% by our math. So the job cuts paid for new spending but did not shrink the total.
What to watch: fourth-quarter costs. By our math the July plan of about $55.7 billion for the year leaves roughly $14.0 billion, slightly above this quarter. A figure near that level would confirm that savings still cover the investments.
🐻 Bear Case
Pre-Tax Profit Rose Only 3%
"Our third quarter results reflect broad-based growth, higher earnings, and stronger returns," chief executive Charlie Scharf said. Profit per share did climb 13%. But profit before tax, which leaves out tax effects and the share count, rose only 3%.
- Revenue: up 2%, after 9% growth last quarter
- Tax: a $170 million one-time benefit, the third in three quarters
- Share count: down 5% after buybacks
- Gains on venture capital and other equity stakes: $4 million, against $847 million last quarter
The comparison also had help. Last year's quarter carried $296 million of severance costs. Without them, pre-tax profit slipped about 1% by our math. Strip out the tax benefit too, and profit per share grew about 5% by the same math.
This matters because tax benefits and buybacks do not repeat the way business growth does. Wells Fargo also bought back less stock than in any of the past five quarters, so that support is weakening too.
What to watch: pre-tax profit in the fourth quarter, when the year-ago figure again includes a large severance charge. Growth below the pace of revenue would show that earnings now depend on items outside the business.
Trading Revenue and Corporate Loans Both Slipped
Regulators lifted a cap on Wells Fargo's size in 2025. The bank then expanded Markets, its business of trading securities and financing clients' trades. That business drove much of this year's growth, and this quarter it shrank.
Chief executive Charlie Scharf called Markets revenue "relatively stable from a year ago". It came in at $1.84 billion, 1% lower. Against last quarter the drop was 17%.
- Bonds, currencies and commodities trading: down 7% from a year ago
- Share trading: up 21%
- Average loans in the investment bank: down 2% from last quarter
- Average loans, whole bank: up $7 billion, after $30 billion the quarter before
This matters because the bank's interest income plan rests on a growing balance sheet. Loans at the end of September were $17 billion higher than in June, so lending may already have resumed. But one weak trading quarter after a 24% jump suggests that the earlier pace owed a lot to busy markets.
What to watch: Markets revenue next quarter against last year's $1.6 billion. A second reading at or below the year-ago level would show that trading has stopped adding to growth.
Capital Ratio Hit the Bottom of Its Target
The CET1 ratio compares a bank's core capital with its assets, weighted by risk. Wells Fargo has set a target range of 10% to 10.5%. The ratio ended September at the bottom of that range, after 10.3% in June.
Loan growth did not cause the drop, because risk-weighted assets hardly changed. Equity shrank instead: common shareholders' equity fell $6.2 billion during the quarter, even though the bank earned $6.0 billion. The balance sheet shows losses that skip the income statement and go straight to equity roughly doubling, to $16.5 billion. The release gives no reason.
What to watch: the ratio in January and the size of the buyback, which the lender cut to $2.5 billion from $6.1 billion a year ago. Another decline would leave less room for both loan growth and repurchases.
Risks this quarter didn't answer
Six standing concerns got partial readings or none in the press release and its supplement. Each one waits for a number that the quarterly filing or a later quarter will supply.
- Corporate credit: commercial write-offs ran at 0.18% of loans, up from 0.10% last quarter, and Commercial Banking set aside $240 million against $39 million a year ago. The filing's table of late-paying commercial loans is the next reading.
- Loans to non-bank lenders: the release does not break out this portfolio. A loss there in the filing would move the case.
- Return target: return on tangible common equity, profit as a share of shareholders' hard capital, was 16.3%. The target is 17–18% and still has no date.
- Credit card profits: the release gives card revenue but not the cost of new accounts. A rising write-off rate on cards would be the warning.
- Legal and regulatory costs: no update. The filing's estimate of possible losses above reserves is the reading.
- Margin without trading: Wells Fargo still does not publish it. The figure would show whether ordinary lending margins have also steadied.
👓 Other Themes
Scharf Sees Customers Holding Up Despite Risks
Chief executive Charlie Scharf said "our data shows that our consumer and business customers are doing well". He named "higher interest rates, higher oil prices and persistent inflation" as risks to the economy. Against them he set "the investment in AI infrastructure, high employment levels and consistent wage growth", which he said still outweigh the risks.
💲 Other KPIs
Write-offs rose from the spring but stayed below last year. The rate was 0.34% last quarter and 0.40% a year ago. Loans that have stopped paying interest dropped to 0.67% of the total, the lowest in five quarters. Reserves cover 1.38% of loans, down from 1.52%.
The provision, the charge a bank takes for expected loan losses, rose 51% from a year ago. The reason is the reserve. Wells Fargo added $46 million to it this quarter after releasing $273 million a year ago. The lender cited larger business and car loan balances.
Deposits grew 11% from a year ago. The mix keeps shifting toward accounts that pay interest. Those balances rose 15%, while interest-free balances slipped 1%. That shift lifted the average rate paid on deposits for a second quarter.
❓ Key Questions
Does the $50 billion net interest income plan still stand?
The release does not restate the July plan. Nine months brought in $36.9 billion, so by our math the fourth quarter needs about $13.1 billion. That is 4% above this quarter, a larger step than any this year.
What cut $8 billion from equity in one quarter?
Losses that go straight to equity grew by $8.2 billion and pulled the main capital ratio to the bottom of its target. The release does not say which holdings or hedges caused them, or whether they will reverse.
What is the lending margin without the trading business?
The reported margin held at 2.43% while trading balances stopped growing. Without a figure that excludes Markets, readers cannot tell whether ordinary lending margins steadied or the mix simply stopped shifting.
When will Wells Fargo reach its 17–18% return target?
Return on tangible common equity was 16.3% with a tax benefit included, down from 17.7% last quarter. The bank has repeated the target for a year without giving a date or the conditions it needs.
Why did Commercial Banking set aside six times more?
The unit's provision rose to $240 million from $39 million. Wells Fargo cited loan growth, but commercial write-offs also climbed from last quarter. The split between growth and weaker borrowers is not in the release.