CNBC’s Jim Cramer dismissed claims that elevated interest rates threaten large bank earnings, noting that Wells Fargo & Co. (NYSE:WFC) expects to increase revenue under higher rate scenarios following its third-quarter financial results.
Rate Scenario Advantage
While recent financial coverage suggests higher interest rates pose a risk to major financial institutions, Cramer highlighted that Wells Fargo’s management expressed a contrasting outlook.
“Big article in the most important financial paper about how big banks earnings are threatened by higher rates,” Cramer posted on social platform X.
“But Wells Fargo tells me they are positioned to make more money in that scenario, Facts are useless even when they are hard to get”.
Strong Third-Quarter Performance
Wells Fargo reported third-quarter 2026 diluted earnings per share of $1.87, representing a 13% increase from $1.66 in the prior-year period.
Total revenue reached $21.87 billion, up 2% year-over-year, missing analysts’ expectations of $22.32 billion. Net income rose 6% to $5.95 billion, supported by broad-based operational growth across several divisions.
CFO Mike Santomassimo confirmed on the earnings call that the bank remains asset-sensitive on its banking book, projecting fourth-quarter net interest income of approximately $13 billion.
“Given we are modestly asset-sensitive, we expect fourth-quarter net interest income excluding Markets to benefit from the higher interest rate environment,” Santomassimo explained.
Loan and Balance Sheet Momentum
The bank achieved an 11% year-over-year increase in both average loans and average deposits, which reached $1.03 trillion and $1.48 trillion, respectively. Chief Executive Officer Charlie Scharf pointed to robust customer activity, noting that debit card spending increased 8% and credit card spending rose 12% compared to the prior-year quarter.
Despite broader economic headwinds from inflation and borrowing costs, Wells Fargo’s return on tangible common equity (ROTCE) improved to 16.3% for the quarter. Management reaffirmed its full-year 2026 net interest income forecast of approximately $50 billion.
How Has WFC Performed in 2026?
On Wednesday, the stock was down about 3.11% to $78.23. Year-to-date, the stock is down about 16%.
Benzinga’s Edge Stock Rankings indicate that WFC maintains a weak price trend in the short, long, and medium terms, with a moderate growth score.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Image via Shutterstock