Wells Fargo reported strong Q2 results with broad-based growth across all segments, driven by the lifting of the asset cap and continued investment. Management guided to stable-to-slightly-lower NIM, emphasizing that the current NIM compression is a strategic choice from deploying balance sheet in the markets business to generate higher future fee income, while expressing confidence in achieving its 17-18% ROTCE target. Diluted EPS grew 25% YoY to $2.00, with revenue up 9%. Every segment grew both NII and non-interest income.
Buzzberg readFull-year 2026 NII guidance maintained at ~$50BWells Fargo reported strong Q2 results with broad-based growth across all segments, driven by the lifting of the asset cap and continued investment. Management guided to stable-to-slightly-lower NIM, emphasizing that the current NIM compression is a strategic choice from deploying balance sheet in the markets business to generate higher future fee income, while expressing confidence in achieving its 17-18% ROTCE target. Diluted EPS grew 25% YoY to $2.00, with revenue up 9%. Every segment grew both NII and non-interest income.Read full analysisCollapse analysis
Wells Fargo reported strong Q2 results with broad-based growth across all segments, driven by the lifting of the asset cap and continued investment. Management guided to stable-to-slightly-lower NIM, emphasizing that the current NIM compression is a strategic choice from deploying balance sheet in the markets business to generate higher future fee income, while expressing confidence in achieving its 17-18% ROTCE target. Diluted EPS grew 25% YoY to $2.00, with revenue up 9%. Every segment grew both NII and non-interest income.
Investment banking fees hit a new record of over $900 million; markets revenue grew 24% YoY as the balance sheet build-out starts to pay off.
Management is maintaining the $50bn +/- NII guidance for 2026, while expecting NIM to stabilize after Q3, with compression driven by growth in lower-spread markets financing balances.
Headcount fell for the 24th consecutive quarter, highlighting the ongoing efficiency drive which funds new investments.
Revenue$33.589B
+6% QoQ
EPS$1.96
+26% QoQ
Gross margin64.63%
reported
Op margin23.96%
reported
What changed this quarter
01
Guidance
Full-year 2026 NII guidance maintained at ~$50B
Guidance tone
02
Returns
Wells Fargo expects to hit returns target and raise the bar
Diluted EPS grew 25% YoY to $2.00, with revenue up 9%. Every segment grew both NII and non-interest income.
03
Efficiency
Headcount expected to keep falling as efficiency push continues
Investment banking fees hit a new record of over $900 million; markets revenue grew 24% YoY as the balance sheet build-out starts to pay off.
04
Credit Cards
Credit card vintages take two to three years to become profitable
Management is maintaining the $50bn +/- NII guidance for 2026, while expecting NIM to stabilize after Q3, with compression driven by growth in lower-spread markets financing balances.
AI, capex & demand read
AI
Platform & monetization
AI is discussed mainly as an efficiency driver and investment area, not as a revenue product. Management says technology and AI should help run the company with less headcount and supports ongoing automation and efficiency efforts.
Demand
Bookings & conversion
Management is confident in achieving its 17-18% ROTCE target in a reasonable timeframe, driven by broad-based growth, improving credit, and continued efficiency gains, while noting the environment is strong but not without risks.
Capex
Investment and capacity
No explicit capex figure was given. Management is making broad-based investments in technology, AI, marketing, cyber defenses, and hiring, partly offset by expense discipline; balance sheet capacity is also being deliberately deployed into markets, with markets-related assets up about $198 billion since end-2024.
Tone · Confident
Management repeatedly emphasized broad-based momentum, raised return confidence, and reaffirmed guidance while acknowledging they are watching for cyclical risk in credit and risk assets.
Supply-chain alpha
A1
Markets business balance sheet growth is deliberately dilutive to NIM, but management states this is a strategic choice to generate higher trading revenue and wallet share from clients. They track the payoff client-by-client and will pull back if it doesn't materialize.
“we've been throwing our balance sheet in the markets business. It has increased $198 billion since the end of 2024 ... early tracking shows that is what's occurring.”
Competitors are taking on more risk in wholesale lending, particularly in AI/data center related financing. Wells Fargo is consciously staying within its risk tolerance, underwriting different parts of the value chain with different repayment expectations.
“There are more risk assets being created on the wholesale side and there's a lot of capital out there that's there to support that. We're doing the pieces of the transactions that we're comfortable with”
Headcount has declined for 24 consecutive quarters and is down significantly from prior years. Management sees further room to reduce headcount through technology and AI, offsetting investment costs and driving operating leverage.
“We expect that we should be able to run this company with less headcount than we've got today. Certainly, technology and AI helps us get at aspects of that in a different way or faster than maybe in the past”
Commercial loan growth is driven by new business, not just revolver utilization. However, period-end loan growth was slower due to tariff-related refund paydowns, creating some quarter-end noise.
“You saw some tariff-related, refund-related paydowns. But there's nothing that I would highlight as sort of a change in overall sentiment”
The credit card growth strategy is a deliberate drag on near-term profitability. Management is prioritizing long-term returns from these growing vintages over short-term profit, but is willing to modulate growth if returns don't materialize.
“over the next couple of years, you will see the profitability of that business just continue to increase and the returns increase in the business.”
Wells Fargo's auto loan growth is being aided by being the preferred financing provider for VW and Audi in the US, indicating a strong partnership for loan originations.
“in part due to becoming the preferred financing provider for Volkswagen and Audi vehicles in the U.S.”
… satisfaction. We are also doing more for our affluent clients. We've been hiring licensed bankers and branch-based financial advisors, and that investment is helping to drive better results with premier client assets up 13% from a year ago. Our auto business returned to growth last year after intentionally scaling back to improve our capabilities, and the momentum has continued. Originations increased 41% from a year ago, and average balances were up 31%. in part due to becoming the preferred financing provider for Volkswagen and Audi vehicles in the U.S. Importantly, credit performance has remained strong and in line with our expectations. Turning to wealth and investment management, revenue grew 13% from a year ago. Wealth and investment management client assets grew 15% from a year ago to over $2.4 trillion, driven by increased market valuations and also benefiting Thank you. Thank you. We are also working to be our client's primary bank by expanding our deposit and lending capabilities and are seeing strong results with average deposits up 10% and average loans up 12% from a year ago. Securities-based lending has been a key driver of loan growth with average balances up 31% …
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