On the Call: Wells Fargo CEO John Stumpf
On the Call: Wells Fargo CEO John Stumpf argues that bank can make money despite low rates
Wells Fargo said Friday that its third-quarter net income and revenue rose as the bank increased consumer lending and collected more fees.
Yet Wells' stock closed down 3 percent after analysts said the company might have trouble making money on interest payments from loans. Interest rates charged to borrowers are scraping historic lows, while the bank's borrowing costs have barely changed.
In a call with analysts, Wells Fargo Chairman, President and CEO John Stumpf explained why interest income might not be such a grave threat.
QUESTION: How can Wells Fargo boost profits if its interest income continues to be squeezed?
ANSWER: "The other half of our revenue comes from noninterest income, and we've shown very good growth in that area. So even though as we gain new households, new customers, if they're not borrowing or if spreads are lower there, we do a lot of other things with these folks and we've seen good growth in that area. So overall revenue, year-over-year, up 8 percent. Those are pretty good numbers."
