Wells Fargo Sees Credit Card Spending Up 15% for Q4

Wells Fargo benefited from a strong economic environment and higher interest rates in 2023.

Wells Fargo CEO and President Charlie Scharf said Friday (Jan. 12) during the bank’s quarterly earnings call that the bank also benefited from its continuing focus on efficiency and credit discipline.

“We grew net income and diluted earnings per share with higher revenue and lower expenses,” Scharf said during the call. “Revenue growth was driven by strong growth in net interest income as well as higher noninterest income. Our expenses were down from a year ago, benefiting from lower operating costs as well as the impact of efficiency initiatives.”

In September, Wells Fargo had trimmed its workforce by nearly 40,000 since the third quarter of 2020 as part of its drive for efficiency.

Zeroing in on some of the trends seen during the year, Scharf said that both net charge-offs and Wells Fargo’s allowance for credit losses increased during the year. In response, the bank continues to monitor its portfolio and tighten credit when necessary.

Average loans increased modestly during the year, with growth during the first half partially offset by weaker loan demand and stronger credit-tightening actions in the second half, Scharf said.

Average deposits declined as consumers spent their money or shifted it to higher-yielding alternatives, he said. Still, the average deposit balances per customer remain above pre-pandemic levels due to wage growth.

“Having said that, there are cohorts of customers that are more stressed,” Scharf added.

Credit card spending was up 15% for the year, while debit card spending rose 1%, he said.

“As we look forward, our business performance remains sensitive to interest rates and the health of the U.S. economy, but we are confident that the actions we are taking will drive stronger results over the cycle,” Scharf said.

Noting other results from 2023, Scharf said Wells Fargo continued to drive mobile adoption by enhancing its mobile app. The bank added 1.6 million mobile customers during the year and saw 11% more mobile logins.

In addition, consumers interacted with its artificial intelligence-powered virtual assistant, Fargo, more than 20 million times in 2023, Scharf said.

The virtual assistant is designed to provide a more personalized and intuitive banking experience.