Wells Fargo Posts Q3 Numbers as Kraken Question Looms

Wells Fargo reported diluted earnings of $1.87 per share on $21.87 billion in revenue for the third quarter of 2026, narrowly beating the $1.85 consensus profit estimate compiled by LSEG while revenue fell short of analyst expectations.The San Francisco-based lender posted net income of $5.951 billion, up 6.5% from $5.589 billion a year earlier, its quarterly filing showed.

Net Interest Income Grows, But Revenue Misses The Street

Net interest income (NII) reached $12.517 billion, a 5% increase from the $11.950 billion recorded in Q3 2025. Although the Federal Reserve's September rate hike to 3.75%–4.00% could affect interest income, the bank's release does not attribute NII growth to that decision.Revenue of $21.87 billion, however, trailed the LSEG consensus of roughly $22.3 billion by more than $400 million, according to CNBC estimates.Non-interest income came in at $9.353 billion, down 1% year over year as lower trading gains offset strength in investment advisory fees. The provision for credit losses rose to $1.029 billion from $681 million a year ago, a 51% jump driven by a higher allowance for commercial and industrial (C&I) and auto loans, with net charge-offs rising in commercial real estate and C&I lending.The efficiency ratio improved to 63% from 65% in the prior-year quarter, while the Common Equity Tier 1 (CET1) capital ratio stood at 10.0%, down from 11.0% a year earlier after accelerated share repurchases.Market revenue totaled $1.835 billion, split between $1.262 billion in fixed income, currencies and commodities (FICC) and $543 million in equities. Return on equity reached 13.8%, compared with 12.8% in Q3 2025, and return on tangible common equity rose to 16.3% from 15.2% over the same period.

Scharf Cites Broad-Based Growth and Expense Discipline

Chief Executive Charlie Scharf framed the quarter around operational momentum rather than headline beats, telling analysts that the bank's ongoing efficiency programme had freed up capital for reinvestment.Wells Fargo has guided to roughly $50 billion in 2026 net interest income since January 2026 and reaffirmed that outlook in July. The Q3 earnings release did not provide new full-year NII guidance."Our third quarter results reflect broad-based growth, higher earnings, and stronger returns," Scharf said in the release. He added that "expense savings have funded much of the investments that are making the company stronger" and noted that internal data showed consumer and business customers "are doing well."The comments extended a tone Scharf set during the second quarter, when Wells Fargo reported net income of $6.4 billion and earnings of $2.00 per share, with profit rising 17% year over year and net interest income increasing 5% to approximately $12.3 billion.

The Kraken Question Draws Silence From Management

Neither the earnings release nor Scharf's prepared remarks addressed Wells Fargo's reported discussions with Payward, the parent company of crypto exchange Kraken, over a potential crypto trading liquidity arrangement. Reports published on October 7 said Payward's business-to-business arm could supply crypto trading liquidity to the bank.The silence is notable given the pace of traditional finance (TradFi) partnerships forming around Payward's institutional services. Wells Fargo itself advised Nasdaq on a $100 million investment in Payward at a $21 billion valuation in September 2026. SoFi signed a separate agreement with Payward on September 3 covering Kraken Prime liquidity and round-the-clock dollar settlement. BNY Mellon entered its own talks with Payward around October 2, according to separate reporting.Payward reported adjusted revenue of $508 million for Q2 2026, up 17% year over year, and disclosed 6.6 million funded accounts. Neither Wells Fargo nor Payward has officially confirmed the discussions. The bank's Q3 filing mentioned digital assets only once, in a standard forward-looking risk disclaimer, without elaboration.

Bank Earnings Season Opens With A Mixed Read on Rate Sensitivity

Wells Fargo's results set an early tone for the banking sector ahead of JPMorgan, Goldman Sachs and Citigroup, all of which report later on October 13.Analysts at CNBC noted that the consensus view heading into the season centered on whether rising rates would lift spread income enough to offset slowing fee revenue and higher provisions.Wells Fargo's earnings call begins at 10:00 AM Eastern Time, where analysts are expected to press Scharf on NII trajectory, commercial real estate exposure and any crypto strategy following the Payward reports. Morgan Stanley reports on October 14, rounding out the first wave of large-bank earnings for the quarter.