JPMorgan Flexes Revenue Muscle Again As Wells Fargo Battles NII Woes

Wells Fargo & Company (NYSE:WFC) shares dipped after the banking giant reported mixed second-quarter 2025 earnings. While the company surpassed analyst expectations for earnings per share and revenue, a significant downward revision in its full-year net interest income (NII) forecast, a key profitability metric, raised investor concerns.

This adjustment, driven by a weaker performance in its Markets division, overshadowed otherwise solid results and drew comparisons to the robust performance of peers like JPMorgan Chase & Co.’s (NYSE:JPM).

Wells Fargo reported a NII of $11.71 billion on Tuesday, down 2% year over year in the second quarter of 2025.

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The bank reported earnings of $1.60 per share, beating the consensus of $1.40.  Revenue increased 1% year over year to $20.82 billion. Analysts expected $20.78 billion.

Lower NII was driven by the impact of lower interest rates on floating rate assets and deposit mix changes, partially offset by lower market funding and deposit pricing.

For fiscal year 2025, Wells Fargo expects NII to be roughly in line with the 2024 income of $47.7 billion. In April, Wells Fargo expected NII to be ~1 to 3% higher than the 2024 NII of $47.7 billion.

In stark contrast to Wells Fargo’s NII headwinds, UBS analyst Erika Najarian commented, “JPMorgan (JPM) flexes its revenue muscle yet again.” The banking behemoth reported adjusted EPS of $4.96, beating consensus estimates of $4.48 in the second quarter of 2025.

Managed net Revenue fell 10% year over year to $45.68 billion. Reported net Revenue declined 11% to $44.91 billion, topping the consensus estimate of $44.17 billion. 

In a comparative analysis, UBS stated on Tuesday, “By contrast, we think WFC has ‘tough comps’ to JPM results. WFC reported ‘core’ EPS of $1.46, excluding a 6-cent gain on the acquisition of the remaining interest in a merchant services JV, and normalizing out an 8-cent tax benefit vs. expectations.”

Delving deeper into Wells Fargo’s NII performance, Najarian highlighted that Wells Fargo’s NII fell 3 cents below Wall Street expectations due to a slight 3-basis-point reduction in its net interest margin (NIM).

Najarian further noted that, as many investors anticipated, Wells Fargo reduced its full-year NII forecast to match last year’s $47.7 billion, largely due to the weaker Markets division performance being offset by higher fees.

The analyst stated, “While the NII revision lower was largely anticipated and negative positioning here appears highly consensus, we still expect shares to open weaker given upward revisions at JPMorgan Chase and decent recent stock performance coming into the print.”

Consequently, analyst estimates are likely to be lowered by about $150 million, or roughly 3 cents per share. While core fee income was largely in line with expectations and expenses came in slightly better (about 1 cent lower), the overall expense outlook remains unchanged.

The analyst also commented on the market’s anticipation regarding Wells Fargo’s capital allocation following its strong stress test results.

“We think the market is also seeking more color on how WFC plans to ‘spend’ its capital windfall from solid stress test results, but we don’t anticipate much specific color from management on buybacks, which would support weakness in the stock if given,” the analyst said.

Price Action: WFC stock is trading lower by 0.82% to $79.51 at last check Wednesday.

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