Q2 2025 marks a new phase in Wells Fargo’s transformation journey

Overview

Wells Fargo delivered a solid financial performance in Q2 2025, reporting earnings of $1.60 per share, which corresponds to an annualized return on tangible equity (ROTE) of 15.2%. This quarter marked the bank’s first earnings release following the formal removal of the long-standing asset cap imposed by regulators. However, while this regulatory milestone represents a significant step forward, it has yet to translate into meaningful balance sheet expansion, with total asset levels remaining broadly stable quarter-over-quarter.

Chief Executive Officer Charlie Scharf commented: “Our second quarter results reflect the progress we are making to consistently produce stronger financial results with net income and diluted earnings per share up from both the first quarter and a year ago. Our efforts to increase fee-based income drove revenue growth and both net interest income and noninterest income grew from the first quarter. We are investing in our businesses but remain focused on expense management. While there continue to be risks as we look forward, activity levels have remained consistent and our strong credit performance continues to point to the strength of our commercial and consumer customers’ financial position.”

Q2 2025 vs. Q2 2024:

Total revenue remained stable at $20.82bn (+1% YoY), with some important movements in the main activity sectors.
- Consumer Banking and Lending revenue increased to $9.23bn (+2% YoY), driven by lower deposit costs and higher deposit balances.
- Commercial Banking revenue declined to $2.93bn (-6% YoY), primarily due to lower net interest income resulting from reduced interest rates. However, this was partially offset by growth in noninterest income.
- Corporate and Investment Banking revenue decreased to $4.67bn (-3% YoY), with Banking revenue declined by 7%, Commercial Real Estate revenue fell by 6% and Markets revenue decreased by 1%.
- Wealth and Investment Management revenue increased slightly to $3.90bn (+1% YoY), driven by growth in asset-based fees due to higher market valuations, although partially offset by lower net interest income.
Net interest income decreased slightly to $11.71bn (-2% YoY), driven by the impact of lower interest rates on floating rate assets and deposit mix changes.
Noninterest income increased to $9.11bn (+4% YoY), including the gain associated with the merchant services joint venture acquisition, an increase in asset-based fees in Wealth and Investment Management on higher market valuations, and higher investment banking fees.
However, noninterest expense recorded a value of $13.38bn (+1% YoY), driven by higher revenue-related compensation expense predominantly in Wealth and Investment Management and higher technology and equipment expense.
Net income recorded a value of $5.49bn (+12% YoY), with diluted EPS of $1.60 (+20% YoY).
The average loans for Q2 2025 were $916.7bn (flat YoY), while average deposits stood at $1.33tn (-1% YoY).
The ROE for Q2 2025 was 12.8%, up from 11.5% in the Q2 2024.
The ROTCE increased to 15.2% from 13.7% in Q2 2024, indicating enhanced profitability and efficient use of tangible common equity.
Wells Fargo maintained a strong capital position with a CET1 ratio of 11.1%, which is significantly above the regulatory minimum plus buffers of 9.7%. This strong capital position provides the bank with a buffer to absorb potential losses and support future growth.
The company repurchased 43.9m shares, or $3.0bn, of common stock in second quarter 2025.

Wells Fargo enters the second half of 2025 with a strengthened operating foundation and increased strategic flexibility following the removal of the asset cap, an important milestone in the firm’s multi-year transformation. Management remains focused on driving sustainable, fee-based revenue growth, while continuing to invest in core businesses and maintaining disciplined expense control. With strong credit quality and consistent client activity levels, the bank is positioned to pursue growth opportunities previously constrained by regulatory limits. In addition, Wells Fargo reiterated its commitment to capital return, having repurchased over $6bn in common stock year-to-date and signaling a planned 12.5% increase in the third-quarter dividend, subject to Board approval.

Following a brief decline triggered by its recent earnings release, Wells Fargo has shown signs of stabilization and recovery. Despite the initial drop, the stock has remained above both the 50-day SMA and the 200-day SMA, preserving its medium-term bullish structure. The RSI has rebounded to 59.66, up from earlier weakness, indicating renewed buying interest. This bounce suggests that the sell-off was likely a short-term reaction rather than a shift in trend. As long as WFC holds above the $77-$78 support zone, the setup remains constructive, with potential for a retest of the recent highs near $82-$83 if broader market conditions remain favorable.