(Reuters) -Wells Fargo's profit beat fourth-quarter expectations on cost cuts, but the lender warned that 2024 net interest income could be 7% to 9% lower than a year earlier, sending its shares down 1.9% before the bell. Rising borrowing costs have benefited banks that charged borrowers more on interest, but with market participants expecting rate cuts by the Federal Reserve this year, their interest income could start to erode. "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 returns over the cycle," CEO Chief Executive Officer Charlie Scharf said in a statement.
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Rising borrowing costs have benefited banks that charged borrowers more on interest, but with market participants expecting rate cuts by the Federal Reserve this year, their interest income could start to erode.