10:15 AM EDT, 10/11/2024 (MT Newswires) -- Wells Fargo's ( WFC ) third-quarter results declined on a yearly basis but earnings topped market estimates as trading gains and investment banking fees helped drive noninterest income higher.

The lender's net income decreased to $1.42 a share for the September quarter from $1.48 the year before, but surpassed the Capital IQ-polled consensus of $1.29. Overall revenue totaled $20.37 billion, down from $20.86 billion and falling short of the Street's view for $20.46 billion.

The stock gained 5.5% in Friday's trading session.

"Our earnings profile is very different than it was five years ago as we have been making strategic investments in many of our businesses and de-emphasizing or selling others," Chief Executive Charlie Scharf said in a statement. "Our revenue sources are more diverse and fee-based revenue grew 16% during the first nine months of the year, largely offsetting net interest income headwinds."

Net interest income dropped 11% to $11.69 billion due to higher funding costs and lower loan balances, among other factors, according to the lender. Noninterest income advanced 12% to $8.68 billion amid trading gains in the markets business and higher investment banking and deposit-related fees.

Corporate and investment banking revenue edged down to $4.91 billion from $4.92 billion in the prior-year quarter, amid lower banking and commercial real estate sales. Within the segment, overall investment banking revenue moved down 3% year over year.

Commercial banking revenue dipped 2% to $3.33 billion. Consumer banking and lending revenue slid 5% to $9.12 billion, while wealth and investment management rose 5% to $3.88 billion.

Provision for credit losses fell to $1.07 billion from nearly $1.2 billion last year. The latest provision figure included a "modest" decrease in the allowance for credit losses, Wells Fargo ( WFC ) said.

"We have maintained strong credit discipline and driven significant operating efficiencies in the company while investing heavily to build a risk and control environment appropriate for a bank of our size and complexity," according to Scharf.

For full-year 2024, the bank now expects net interest income to be down about 9% annually, with the figure in the fourth quarter to be "roughly in line" with the prior period, according to a presentation. In July, the lender forecast net interest income to decline between 8% and 9%. It continues to project noninterest expense at about $54 billion for the current year.

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