July 14 (Reuters) – Wells Fargo’s profit jumped 17% in the second quarter as volatile markets kept its trading desks busy, while strong loan growth boosted interest income.
The fourth-largest U.S. lender’s net income was $6.41 billion, or $2.00 per share, in the three months ended June 30, it said on Tuesday. That compares with $5.49 billion, or $1.60 per share, a year earlier.
“Consumer spending is higher, charge-offs and delinquencies are lower, and savings and investments are growing across consumer segments. Businesses are cautious but balance sheets and cash flows remain strong resulting in strong credit performance,” CEO Charlie Scharf said in a statement.
Shares of the San Francisco, California-based bank rose 1.4% in premarket trading. The stock had slipped nearly 6% this year through last close, underperforming peers.
The lifting of the $1.95 trillion asset cap last year drew a line under the bank’s regulatory constraints and freed Wells Fargo to accelerate Scharf’s growth plans.
The bank has since focused on growing its credit card and auto businesses, while also hiring bankers from rivals in its commercial business to drive growth.
Wells Fargo’s net interest income (NII), the difference between what a bank earns on loans and pays out on deposits, rose 5% to $12.32 billion in the quarter from a year earlier. Average loans jumped 12% from a year earlier.
Trading business also gained momentum as Wells Fargo deploys more balance sheet to the markets business, which was constrained during the asset-cap era.
The bank’s markets revenue, which includes its trading business, jumped 24% to $2.21 billion in the second quarter.
“Concerns around affordability and inflation exist, but the labor market and wage growth remain strong. We know that such favorable conditions do not go on forever so we are being selective about how much and where to grow,” Scharf said.
The U.S. economy has stayed resilient as higher tax refunds cushioned the impact of elevated energy prices following the conflict in the Middle East. But worries remain around the impact on inflation.
Rivals JPMorgan Chase and Bank of America on Tuesday also reported a jump in second-quarter profit, driven by dealmaking and strong trading.
INVESTMENT BANKING SHINES
Dealmaking has accelerated in 2026 as companies take advantage of a more relaxed regulatory environment and strike mega deals to build scale.
Equity capital markets also had a blowout quarter, underpinned by a wave of large initial public offerings and AI-linked follow-on share sales.
Wells Fargo’s investment banking fees jumped 35% to $939 million in the quarter from a year earlier, driven by higher debt and equity underwriting fees.
The bank won mandates on several landmark transactions during the quarter, including advising U.S. utility NextEra Energy on its $67 billion deal for rival Dominion Energy.
Wells Fargo served as a joint bookrunner on SpaceX’s blockbuster $86 billion IPO, the largest on record. It also advised Apollo on a $35 billion financing package supporting AI lab Anthropic’s compute expansion.
The bank has steadily expanded its investment banking business and is increasingly winning bigger and more complex M&A deals.
Wells Fargo climbed to fourth place in U.S. M&A rankings by volume in the first half of 2026 from eighth a year earlier, according to Dealogic data.
(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Sriraj Kalluvila)
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