Wells Fargo (WFC, Financial) reported a 6% increase in first-quarter profit, driven by higher fees from wealth management and investment banking. However, the CEO warned that U.S. tariff policies might slow economic growth. Despite initial optimism in early 2025 due to economic resilience and pro-business policies, recent tariff adjustments have sparked inflation concerns, dampening market sentiment and raising fears of a potential recession.
The bank's net profit rose from $4.62 billion (or $1.20 per share) to $4.89 billion (or $1.39 per share). This growth comes as Wells Fargo focuses on cost reduction, regulatory issues, and business investments. Operating expenses dropped 3% to $13.89 billion, and credit quality remained stable despite tariff-induced loan default concerns.
Investment banking fees surged 24% to $775 million, thanks to increased debt capital market activity. Wealth management also performed well, with investment advisory and brokerage fees up 7% to $3.17 billion. However, net interest income fell 6% to $11.5 billion. The bank maintains its full-year interest income forecast of 1%-3% growth.
Wells Fargo continues to face a $1.95 trillion asset cap due to past regulatory issues, limiting growth in deposits and investment banking. The bank has improved its governance and risk management, lifting five regulatory orders since 2025.
