Wells Fargo CEO Says Consumer Credit Has Yet to Weaken
CEO Charlie Scharf said higher prices and financing costs are weighing on consumers, but Wells Fargo does not yet see signs of weakening consumer credit. The bank reported third-quarter earnings of $1.87 per share and revenue of $21.87 billion.
Wells Fargo & Co. (NYSE: WFC) said consumer credit remains resilient despite pressure on households from prices, rising interest rates and inflation above target. On the bank’s third-quarter earnings call, CEO Charlie Scharf said higher prices continue to weigh on consumer sentiment. He noted that lower-income households remain more sensitive to financing costs, inflation, and elevated living and fuel expenses.
Scharf cited sticky inflation, the Middle East conflict and persistent fiscal deficits as sources of uncertainty. The Federal Reserve raised the federal funds rate by 25 basis points last month. Officials’ median projection in the September dot plot indicated one additional quarter-point increase later this year. 4%, according to the Bureau of Economic Analysis.
Scharf said consumer credit conditions would weaken at some point, but Wells Fargo does not see signs of that yet. Early-stage delinquencies are at historically low levels, and the The charge-off ratio declined from the prior quarter and from the same period last year. In the third quarter, Wells Fargo customers’ credit card spending increased 12% year over year, while debit card spending rose 8%. CFO Mike Santomassimo said gas and energy costs are “meaningful for sure,” accounting for 3% to 6% of spending depending on consumers’ income or wealth level.
He said consumers have offset those costs by saving in other spending categories. ” Gas prices have climbed amid the war in the Middle East. 0821 a year ago. 6533.
85, according to Pro. 29 billion. 9 in pre-market trading. Wells Fargo shares rank in the 43rd percentile for Momentum and the 43rd percentile for Growth.