Wells Fargo Stock Rises After Earnings Beat. It Gets a Lift From Higher Rates.

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The bank reported third-quarter earnings of $1.48 a share on revenue of $20.86 billion. Wall Street had expected $1.24 on $20.09 billion.

Wells Fargo reported third-quarter earnings of $1.48 a share on revenue of $20.86 billion.The lender said it benefited from higher net interest income and noninterest income, driven by higher rates and the investments made in its businesses.

Wells Fargo is scheduled to report earnings Friday morning, providing insight on how interest rates and rising Treasury yields have impacted banks. Net interest income for the quarter is also expected to increase. Analysts are expecting it to clock in at $12.73 billion, higher than last year’s $12.1 billion. Higher interest rates fatten a bank’s spread between what it pays depositors for their money and what it can charge for loans. The Federal Reserve has increased interest rates 11 times in an effort to fight historically high inflation.

“The prospects of interest rates remaining higher for longer has recently pushed Treasury yields higher and bank stocks lower,” Keefe, Bruyette & Woods analyst Christopher McGratty wrote in a research note last week. Wells Fargo stock has declined 4.3% this year.

 

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