Wells Fargo & Co Earnings - Q4 2025 Analysis & Highlights
Wells Fargo & Co.'s Q4 2025 earnings call highlighted strong financial results, significant growth across various business segments, and a clear strategic focus on efficiency, capital optimization, and sustained growth.
Key Financial Results
Net Income: Increased to $21.3 billion in 2025.
Diluted Earnings Per Share (EPS): Grew 17% from a year ago. In Q4, diluted EPS was $1.62, up 13% year-over-year. Excluding severance expense, diluted EPS was $1.76.
Revenue Growth: Fee-based revenue was up 5% from a year ago.
Return on Tangible Common Equity (ROTCE): Increased to 15% in 2025.
Net Interest Income (NII): Increased $381 million or 3% from Q3. NII, excluding Markets, increased $167 million.
Non-Interest Income: Increased $419 million or 5% from a year ago.
Non-Interest Expense: Declined $174 million from a year ago.
Business Segment Results
Credit Card Business: Opened nearly 3 million new credit card accounts in 2025, up 21% from a year ago. Credit card balances were up 6% from a year ago. Credit Card revenue grew 7% from a year ago.
Auto Business: Returned to growth in 2025 with 19% growth in loan balances from a year ago. Auto revenue increased 7% from a year ago.
Home Lending Business: Headcount reduced by over 50% and third-party mortgage loans serviced reduced by over 40% over the past three years. The servicing portfolio was reduced by $90 billion in 2025 alone. Home Lending revenue declined 6% from a year ago.
Consumer, Small and Business Banking: Had stronger growth in net checking accounts in 2025. 700 branches were refurbished in 2025. 50% of consumer checking accounts were opened digitally in 2025. Mobile active customers grew by $1.4 million in 2025, up 4% from a year ago. Revenue increased 9% from a year ago.
Wells Fargo Premier: Premier deposit and investment balances grew 14% during 2025.
Wealth and Investment Management (WIM): Saw increased total hires, declining attrition, and accelerating net asset flows in the second half of 2025. Revenue increased 10% from a year ago.
Commercial Bank: Hired 185 coverage bankers over the last two years, with over 60% hired in 2025. Fees from providing investment banking and markets capabilities to Commercial Banking clients grew over 25% in 2025. Revenue was down 3% from a year ago.
Corporate and Investment Banking (CIB): Banking revenue declined 4% from a year ago. Investment banking revenue was up 11% for the full year. Markets revenue grew 7% from a year ago. Average loans grew 14% from a year ago and 6% in Q3.
Capital Allocation
Excess Capital Returned to Shareholders: $23 billion in 2025.
Common Stock Dividend: Increased by 13% per share in 2025.
Common Stock Repurchases: $18 billion in 2025. $5 billion in Q4.
CET1 Ratio: 10.6%. The target CET1 ratio is approximately 10% to 10.5%.
Industry Trends and Dynamics
Credit Performance: Remained strong with net charge-offs declining 16% from a year ago.
Economy and Customers: The economy and customers remain resilient.
Commercial Real Estate (CRE): Office valuations continue to stabilize, with additional losses expected to be within expectations. Good demand exists in other CRE sectors like multifamily, industrial, and data centers.
Credit Card Rate Caps: The company acknowledges the underlying issue of affordability and is monitoring potential actions from the administration or Congress.
Competitive Landscape
Commercial Bank: Wells Fargo is the market leader with strong returns.
Investment Bank: Goal is to be a top 5 US investment bank. The company grew its share in 2025 and increased its announced US M&A ranking to 8th in 2025, up from 12th in 2024.
Auto Business: Became the preferred financing provider for Volkswagen and Audi brands in the United States.
Macroeconomic Environment
Consumer Health: No meaningful shifts observed in consumer behavior trends, such as checking accounts with unemployment flows, direct deposit amounts, overdraft activity, and payment outflows.
Interest Rates: Key assumptions for 2026 include two to three rate cuts by the Federal Reserve.
Yield Curve: The shape of the yield curve is a factor influencing net interest income.
Growth Opportunities and Strategies
Balance Sheet Growth: Assets grew 11% from a year ago, including broad-based loan growth and higher trading assets.
Digital Enhancements: Mobile app enhancements made it easier to open accounts.
Strategic Partnerships: Overland Advantage with Centerbridge Partners enabled direct lending products, helping clients raise approximately $7 billion in financing.
Markets Business: Utilizing the balance sheet to accelerate growth, with trading-related assets increasing 50% in 2025.
Efficiency Initiatives: 22 consecutive quarters of headcount reductions. Successfully delivered approximately $15 billion in gross expense saves over five years.
Financial Guidance and Outlook
Net Interest Income (NII) 2026: Expected to be $50 billion, plus or minus.
Markets NII 2026: Expected to grow to approximately $2 billion.
NII Excluding Markets 2026: Expected to be approximately $48 billion.
Loan Growth 2026: Average loans expected to grow mid-single digits from Q4 2025 to Q4 2026.
Deposit Growth 2026: Average deposits expected to grow mid-single digits over the same period.
Non-Interest Expense 2026: Expected to be approximately $55.7 billion.
Severance Expense 2026: Assumptions do not include significant additional severance, resulting in an approximately $700 million decline.
Revenue-Related Expenses 2026: Expected to increase by approximately $800 million in Wealth and Investment Management.
FDIC Assessment Expense 2026: Expected to increase by approximately $400 million.
Other Expenses 2026: Expected to increase approximately $300 million.
Gross Expense Reductions 2026: Expected to be approximately $2.4 billion due to efficiency initiatives.
Medium-Term ROTCE Target: 17% to 18%.
Share Repurchases 2026: Currently expected to be lower.
