Wells Fargo (WFC) Q3 2026: Markets Revenue Stalls as Trading Assets Grow

Wells Fargo (WFC) reported third-quarter 2026 results on October 13, 2026, in an 8-K filing and on its earnings call. Most of the business kept growing, but Q3 2026 Markets revenue at Wells Fargo came in clearly below what the company had signaled [1][2][3].

Where the main questions stand

Four questions have framed the company since its asset cap was lifted: whether balance sheet growth can carry full-year net interest income (NII) to about $50 billion, whether investment banking and trading can gain share, whether expenses and credit costs can support a 17% to 18% return target, and how much wealth management growth comes from rising markets. In the third quarter, net interest margin held at 2.43% and NII rose 5% from a year earlier. The company kept its full-year guidance and said it expects about $13 billion of NII in the fourth quarter, which still has to be delivered [1][3].

Expenses and credit continued to support profit. Headcount fell 8% from a year earlier, noninterest expense declined 1%, and the net loan charge-off ratio was 0.38% [1][2]. Wealth and Investment Management revenue grew 12%, which the company attributed to higher market valuations of client assets; it did not disclose net inflows [1].

Return on average tangible common equity (ROTCE) was 16.3%. About 0.5 percentage point of that came from a one-time tax benefit, so the sustainable level is roughly 16%. Reaching the target still depends on fourth-quarter NII and on Markets revenue recovering in line with the assets committed to it [1].

Wells Fargo is a US-focused financial services company with four reportable segments: Consumer Banking and Lending, Commercial Banking, Corporate and Investment Banking, and Wealth and Investment Management [4]. It earns net interest income by funding loans and securities mainly with deposits, and noninterest income from investment banking, trading, advisory fees, and deposit and card fees. NII made up about 57% of total revenue in the quarter [1].

Markets revenue stalled while trading assets grew

Markets revenue fell short of the expectation the company gave during the quarter. Markets revenue in Corporate and Investment Banking was $1.835 billion, down 1% from a year earlier and down 17% from the second quarter. Fixed income revenue fell 7% year over year, while equities revenue rose 21% [1]. The CFO said that at an industry conference in September he had expected third-quarter Markets revenue to be up by a mid-single-digit percentage year over year [3]. In the second quarter, Markets revenue had grown 24% [5].

The company attributed the shortfall to market conditions late in the quarter. Management said sharp interest rate moves in the final weeks of September pressured fixed income asset prices and reduced client activity in strategic transactions, hedging and new issuance, while low equity volatility hurt the equity derivatives business [3]. Management also noted that higher rates shift part of Markets NII into trading revenue, so total Markets revenue is the right measure [3]. The company did not quantify these effects, and how much may come back is unknown.

The balance sheet committed to Markets did not earn a matching return this quarter. Average trading-related assets in the segment were $402.56 billion, up 28% from a year earlier, while Markets revenue did not grow [2]. The segment's return on allocated capital was 15.5%, down from 19.2% in the second quarter and 16.8% a year earlier, even as allocated capital rose from $44 billion to $46.5 billion [2]. Segment revenue grew 3% and segment net income fell 2% [1]. Company-wide trading gains fell 21%, the main reason noninterest income declined 1% [2]. Markets revenue was still up 14% for the first nine months, so one weak quarter does not by itself disprove the expansion [3].

Investment banking share kept rising

The data this quarter support continued share gains in investment banking. Banking revenue rose 8%, with M&A revenue up 30% and both equity capital markets and investment grade underwriting fees up 33%, while leveraged finance revenue declined [1]. Segment investment banking fees were $908 million, up 10% from a year earlier and down 4% from the second quarter [2]. Management said its equity capital markets share rose to 3.9% and its rank in announced US M&A volume improved to sixth from ninth a year ago [3]. On the second-quarter call, management had cited a fourth-place M&A rank; neither statement gave its measurement window, so it is unclear whether the rank slipped [6].

Conclusion

The quarter strengthened the case on net interest income and expense discipline, and it showed that trading revenue remains sensitive to markets. On growth, loans and deposits each rose 11% year over year and net interest margin stopped declining [1]. On profit conversion, expenses fell and credit costs stayed low, but lower trading gains and venture capital gains took quarterly ROTCE from 17.7% in the second quarter to 16.3% [1]. On capital generation, higher rates reduced accumulated other comprehensive income and the CET1 ratio fell to 10.0%, at the low end of the company's 10% to 10.5% target range; the company repurchased $2.5 billion of common stock and raised its quarterly dividend to $0.50 per share [1][3]. The next tests are whether fourth-quarter NII reaches the roughly $13 billion the company has guided to, and whether Markets returns to double-digit growth against a lower prior-year base and lifts the segment's return on allocated capital back above 17%.

Sources

[1] WFC 8-K filed 2026-10-13 · Q3 2026 earnings release (Exhibit 99.1), October 13, 2026, Wells Fargo, 8-K Exhibit 99.1 earnings release, https://www.sec.gov/Archives/edgar/data/72971/000007297126000318/wfc3qer10-13x26ex991xrelea.htm [2] WFC 8-K filed 2026-10-13 · Q3 2026 quarterly financial supplement (Exhibit 99.2), October 13, 2026, Wells Fargo, 8-K Exhibit 99.2 quarterly supplement, https://www.sec.gov/Archives/edgar/data/72971/000007297126000318/wfc3qer10-13x26ex992xsuppl.htm [3] WFC Q3 2026 earnings call 2026-10-13, October 13, 2026, Wells Fargo, earnings call, https://www.wellsfargo.com/about/investor-relations/quarterly-earnings/ [4] WFC 2025 Form 10-K — four reportable operating segments, February 24, 2026, Wells Fargo, Form 10-K, https://www.sec.gov/Archives/edgar/data/72971/000007297126000133/wfc-20251231_d2.htm [5] WFC Q2 2026 Form 10-Q — Markets revenue and returns, July 28, 2026, Wells Fargo, Form 10-Q, https://www.sec.gov/Archives/edgar/data/72971/000007297126000302/wfc-20260630.htm [6] WFC Q2 2026 earnings call — capital markets share gains, July 14, 2026, Wells Fargo, earnings call, https://www.wellsfargo.com/about/investor-relations/quarterly-earnings/