Wells Fargo profit lifts in Q4, net income misses estimates
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The news: While Wells Fargo saw profits increase 6% from a year earlier during the final three months of 2025, the US bank missed profit estimates as severance costs hit results.
The numbers: Wells Fargo said it spent USD612 million ($916.03 million) on severance which had been part of a cost-cutting plan to streamline its workforce, seeing expenses hit USD13.7 billion in Q4, compared with USD13.6 billion projected by a Bloomberg survey.
Net interest income (NII) rose 4% in the quarter from a year earlier, coming in at USD12.3 billion in the fourth quarter, taking full-year NII to USD47.5 billion.
Net income for the quarter was USD5.36 billion, or USD1.62 per share, below analyst estimates of USD1.66 per share. The bank generated USD21.3 billion in net income for 2025, compared with analysts’ estimates of USD21.6 billion.
The context: Wells Fargo has been reducing headcount for a number of years in efforts to increase efficiency. The bank had almost 211,000 employees at the end of September, which dropped to just above 205,000 by the end of 2025.
The US’ fourth-largest bank also benefited in 2025 as regulators removed a USD1.95 trillion asset cap in June, removing the penalty linked to Wells Fargo's fake-accounts scandal, seeing the bank’s total assets surge past the USD2 trillion mark for the first time.
What they said: “We have built a strong foundation and have made great progress in improving growth and returns, though we have operated with significant constraints,” CEO Charlie Scharf said in the statement. Referring to the Federal Reserve-imposed asset cap lifted in June, Scharf added: “We are excited to now compete on a level playing field and are able to dedicate even more resources to growth with the ability to grow our balance sheet.”
The sources: Wells Fargo earnings release, Wells Fargo earnings presentation, WSJ, Bloomberg, Reuters
