Wells Fargo's interest income outlook spooks investors

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Wells Fargo & Co's aggressive cost cutting helped boost its quarterly profi...

- Wells Fargo & Co’s aggressive cost cutting helped boost its quarterly profit, but shares in the lender fell 3 percent on Friday after it dialed back its forecast for how much net interest income it would bring in this year.

The outlook overshadowed a jump in Wells Fargo’s first-quarter profit, and comes as investors were already on edge following the abrupt departure of former Chief Executive Tim Sloan last month. Analysts pushed Parker on why the bank was lowering its net interest income outlook while peers remained more optimistic, and for details on how non-interest-related revenues from fees would shape up.

Finance chief John Shrewsberry reaffirmed that the lender was on track to hit its 2019 cost target. But the longer-term outlook is less certain, since the bank suspended its expense targets for 2020 after Sloan’s exit. Shrewsberry said Wells Fargo expects a decline of 2 percent to 5 percent in net interest income this year from 2018. It previously forecast between a 2 percent rise and a 2 percent fall.

 

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