Wells Fargo's Results Sink on Legal Reserves
15 January 2020 - 12:40AM
Dow Jones News
By Ben Eisen
Wells Fargo & Co. said Tuesday that fourth-quarter profit
sank 53%.
The bank's quarterly earnings totaled $2.87 billion, versus
$6.06 billion a year earlier. Per-share earnings of 60 cents missed
the $1.12 expected by analysts polled by FactSet.
Revenue of $19.9 billion was down from $21 billion a year ago.
Analysts had expected $20.1 billion.
The lender took a financial hit related to the fake-account
scandal that has dogged Wells Fargo since 2016. The company booked
a $1.5 billion charge for legal costs related to its long-running
sales-practices problems.
The quarter also marked the start of the tenure of Charles
Scharf, who joined Wells Fargo as CEO in October. He has been
tasked with resolving a pile of outstanding regulatory issues and
improving the San Francisco-based bank's reputation, which was hit
hard by a scandal involving fake customer accounts.
Behind the scenes, Wells Fargo's business lines have also been
struggling. Revenue declines have forced the bank to refocus on
cutting costs.
The Federal Reserve cut interest rates three times last year,
adding pressure on the banking sector by crimping what banks can
charge on loans.
Net interest income fell 11% from $12.6 billion in the year-ago
quarter.
Noninterest income, which is more protected from rate
fluctuations, rose 4% from $8.3 billion a year ago.
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Write to Ben Eisen at ben.eisen@wsj.com
(END) Dow Jones Newswires
January 14, 2020 08:25 ET (13:25 GMT)
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