Wells Fargo reported on Wednesday profits and revenue for its third quarter that topped Wall Street’s expectations, but the current environment of low interest rates may be undermining the bank’s profitability.
San Francisco-based Wells earned $5.8 billion, or $1.05 a share, on revenue of $21.88 billion for the three months that ended in September.
Wall Street had predicted that profits would be $1.04 a share and revenue would total $21.76 billion.
Compared to the year-ago third quarter, profits rose 1.2 percent and revenue increased 2.1 percent.
“Wells Fargo’s strong third-quarter results reflected the ability of our diversified business model to generate consistent financial performance in an uneven economic environment,” Chief Executive Officer John Stumpf said in a prepared release.
Amid low interest rates, the profitability of the bank’s lending operations have eroded. Wells Fargo’s net interest margin fell to 2.96 in the third quarter, compare with 2.97 in the year-ago fourth quarter.
In trading Wednesday, Wells Fargo shares shares fell 36 cents, or 0.7 percent, to $51.50.