Wells Fargo reported lower earnings and revenue for the third quarter than a year ago on Friday amid a sizable decline in net interest income.
Here’s what the bank did compared with Wall Street estimates, based on a survey of analysts by LSEG:
Earnings per share: $1.42 per share, not comparable to the $1.28 cents estimate
Revenue: $20.37 billion versus $20.42 billion expected
Shares of the bank rose 3% in premarket trading after the results.
The San Francisco-based lender posted $11.69 billion in net interest income, a key measure of what a bank makes on lending. The number marked an 11% decrease from the same quarter last year that was less than the FactSet estimate of $11.9 billion. Wells said the decline was due to higher funding costs amid customer migration to higher-yielding deposit products.
“Our earnings profile is very different than it was five years ago as we have been making strategic investments in many of our businesses and de-emphasizing or selling others,” CEO Charles Scharf said in a statement. “Our revenue sources are more diverse and fee-based revenue grew 16% during the first nine months of the year, largely offsetting net interest income headwinds.”
Wells saw net income fall to $5.11 billion, or $1.42 per share, in the third quarter, from $5.77 billion, or $1.48 per share, during the same quarter a year ago. Revenue dipped to $20.37 billion from $20.86 a year ago.
The bank set aside $1.07 billion as a provision for credit losses, which included a modest decrease in the allowance for credit losses.
Wells repurchased $3.5 billion of common stock in the third quarter, bringing the nine-month total to more than $15 billion, which marks a 60% increase from a year ago.
The bank’s shares have gained 17% in 2024, lagging the S&P 500.
Sebastian Siemiatkowski, CEO of Klarna, speaking at a fintech event in London on Monday, April 4, 2022.
Chris Ratcliffe | Bloomberg via Getty Images
Klarna saw its losses jump in the first quarter as the popular buy now, pay later firm applies the brakes on a hotly anticipated U.S. initial public offering.
The Swedish payments startup said its net loss for the first three months of 2025 totaled $99 million — significantly worse than the $47 million loss it reported a year ago. Klarna said this was due to several one-off costs related to depreciation, share-based payments and restructuring.
Revenues at the firm increased 13% year-over-year to $701 million. Klarna said it now has 100 million active users and 724,00 merchant partners globally.
It comes as Klarna remains in pause mode regarding a highly anticipated U.S. IPO that was at one stage set to value the SoftBank-backed company at over $15 billion.
Klarna put its IPO plans on hold last month due to market turbulence caused by President Donald Trump’s sweeping tariff plans. Online ticketing platform StubHub also put its IPO plans on ice.
Prior to the IPO delay, Klarna had been on a marketing blitz touting itself as an artificial intelligence-powered fintech. The company partnered up with ChatGPT maker OpenAI in 2023. A year later, Klarna used OpenAI technology to create an AI customer service assistant.
Last week, Klarna CEO Sebastian Siemiatkowski said the company was able to shrink its headcount by about 40%, in part due to investments in AI.
Klarna is synonymous with the “buy now, pay later” trend of making a purchase and deferring payment until the end of the month or paying over interest-free monthly installments.
Nikolas Kokovlis | Nurphoto | Getty Images
The U.K. government on Monday laid out proposals to bring short-term loans under formal rules as it looks to clamp down on the “wild west” of the buy now, pay later sector.
Fintech firms like Klarna and Block’s Afterpay have flourished by offering interest-free financing on everything from fashion and gadgets to food deliveries — while at the same time stoking concerns around affordability. The space is highly competitive, with U.S. player Affirmlaunching in the U.K. just last year.
City Minister Emma Reynolds said in a statement Monday that the U.K.’s new rules were designed to tackle a sense of “wild west” in the buy now, pay later (BNPL) space, adding the measures “will protect shoppers from debt traps and give the sector the certainty it needs to invest, grow, and create jobs.”
Under the U.K. proposals, BNPL firms will be required to make upfront checks to ensure people can repay what they borrow and make it easier for customers to access refunds.
Consumers will also be able to take BNPL complaints to the Financial Ombudsman, a service created by the U.K. Parliament to settle disputes between consumers and financial services firms.
The rules are expected to come into force next year, according to the government.
Klarna said it has long supported calls to bring BNPL into the regulatory fold. “It’s good to see progress on regulation, and we look forward to working with the FCA on rules to protect consumers and encourage innovation,” a spokesperson for the company told CNBC via email.
“Regulation will give clarity and consistency to the sector, establishing a consistent operating environment and compliance standards for all providers,” spokesperson for Clearpay, the U.K. arm of Afterpay, said in an emailed statement.
“It will also create a more sustainable foundation for the future of BNPL as it continues to grow as an everyday payment option for consumers.”
While buy now, pay later firms have publicly expressed support for regulation, many were concerned about regulators applying outdated rules to their business models. The Consumer Credit Act, which regulates lending and borrowing in the U.K., has existed for over 50 years.
For its part, the government said it plans to adapt the Consumer Credit Act to allow for a “modern, pro-growth framework that reflects how people borrow today.”