10:54 AM EDT, 07/12/2024 (MT Newswires) -- Wells Fargo ( WFC ) results rose above market expectations for the second quarter, but the lender's net interest income declined annually and fell short of analysts' estimates.

Earnings increased to $1.33 a share for the quarter through June 30 from $1.25 a year earlier, the banking giant said Friday, compared with the Capital IQ-polled consensus of $1.28. Overall revenue ticked up 1% to $20.69 billion, ahead of the Street's view for $20.23 billion.

Net interest income dropped 9% to $11.92 billion, trailing the consensus on Visible Alpha for $12.09 billion, amid higher interest rates on funding costs and lower loan balances, according to the bank. The stock was falling 6.9% in Friday trade.

Noninterest income advanced 19% to $8.77 billion, driven by factors including higher trading revenue in the markets business and an increase in investment banking fees.

"We continued to see growth in our fee-based revenue offsetting an expected decline in net interest income," Chief Executive Charlie Scharf said in a statement. "Credit performance was consistent with our expectations, commercial loan demand remained tepid, we saw growth in deposit balances in all of our businesses, and the pace of customers reallocating cash into higher yielding alternatives slowed."

Corporate and investment banking revenue rose 4% to $4.84 billion, aided by gains in banking and markets. Investment banking revenue surged 38% year over year. Commercial banking revenue declined 7% to $3.12 billion. Consumer banking and lending revenue slid 5% to $9.01 billion, while wealth and investment management grew 6% to $3.86 billion.

Wells Fargo's ( WFC ) provision for credit losses totaled $1.24 billion, narrowing from $1.71 billion last year. The latest provision figure included a "modest" decrease in the allowance for credit losses as a higher allowance for credit card loans were more than offset by reduced allowances for most other portfolios, the lender said.

For full-year 2024, the company now expects noninterest expense to be about $54 billion versus the prior outlook of $52.6 billion, according to an earnings presentation. The figure came in at $13.29 billion in the second quarter. The lender currently anticipates net interest income to be down 8% to 9%, compared with its prior guidance of a 7% to 9% drop, although it said many factors are uncertain, the presentation showed.

"Our risk and control work remains our top priority, and we are also continuing to execute on our strategy to better serve our customers and drive higher returns over time," Scharf said.

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