Wells Fargo & Co. (NYSE: WFC) reported first-quarter 2025 net income of $4.9 billion, or $1.39 per diluted share, up 6% year-over-year, despite flat loan growth and signs of softening demand in key commercial and consumer lending areas relevant to the equipment finance sector.
Average loans declined 2% year-over-year to $908.2 billion, while commercial and industrial loan provisioning increased—suggesting a more conservative credit posture in the face of economic uncertainty and shifting business activity.
Commercial Banking, which includes secured lending and lease products, posted a 7% revenue decline year-over-year, with net interest income down 13% due to lower rates and compressed spreads. The segment also saw lower lease income, despite stable loan balances. Noninterest income rose 8%, aided by treasury and investment banking fees.
Auto lending fell 21% from a year ago. Wells attributed the decline to lower balances and spread compression, reflecting tightening in consumer credit demand or affordability concerns.
Corporate and Investment Banking (CIB) lending revenue also fell 9% year-over-year, but investment banking rose 13%, signaling selective strength in capital markets activity, particularly debt issuance. Average loans in the CIB segment declined 2% year-over-year, with deposit growth of 11%, a sign that clients are holding cash amid policy and rate uncertainty.
Broader Economic Signals
Net interest income fell 6% year-over-year to $11.5 billion, weighed down by lower loan balances, customer migration to higher-yielding deposit products, and lower floating-rate asset yields. The net interest margin declined to 2.67%, continuing a downward trend that may weigh on future lending appetite across sectors.
Wells Fargo CEO Charlie Scharf noted that while the firm is “prepared for a slower economic environment in 2025,” businesses and consumers are entering it from “a position of strength.” He also acknowledged the risks posed by ongoing trade disputes and policy shifts, which may affect equipment investment decisions.
Despite the pressure on loan growth, the bank maintained strong capital levels, with a Common Equity Tier 1 (CET1) ratio of 11.1%, and returned $3.5 billion to shareholders through stock repurchases.
Outlook
For equipment finance professionals, Wells Fargo’s results point to a cautious credit environment, especially in sectors like auto and commercial real estate. Slower origination in key lending areas, coupled with margin compression, signals that lessors and lenders may need to prioritize credit quality and portfolio resilience in the coming quarters.
While the firm reported momentum in certain fee-based businesses and improved efficiency, the overall tone remains one of strategic caution, in contrast to JPMorgan’s slightly more active lending stance.
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