Wells Fargo reported worse than expected Q4 earnings before the bell Tuesday. $WFC reported along with JPMorgan $JPM and Citigroup. The bank continued to feel ramifications from the sales scandal. Quarterly profit was $2.87 billion, down over 50% from the year-ago period,
Wells Fargo reported worse than expected Q4 earnings before the bell Tuesday. $WFC reported along with JPMorgan $JPM and Citigroup. The bank continued to feel ramifications from the sales scandal. Quarterly profit was $2.87 billion, down over 50% from the the year-ago period.
Wells Fargo & Co NYSE: WFC Reported Earnings Before Open Tuesday
$0.93 Missed $1.12 EPS And $19.86 Bil Missed $20.14 Billion Forecast in Revenue
Wells Fargo announced on Tuesday a $2.87 billion profit, compared with $6.06 billion in the year-ago period, a decline of more than 50%. Fourth-quarter profits fell as persistent low interest rates and litigation charges weighed on its financial results. Earnings of 93 cents per share missed $1.12 per share forecast by Refinitiv. Revenue: $19.86 billion missed $20.14 billion forecast by Refinitiv
The bank took a financial loss in part related to the retail sales scandal that has plagued Wells Fargo since 2016. The company booked a $1.5 billion charge for legal costs related to litigation stemming from its fake-account problems and others.
Last October Wells Fargo had announced the appointment of Charles W. Scharf as the new Chief Executive Officer and President, effective October 21. Scharf was previously Chairman and CEO at Bank of New York Mellon.
Wells Fargo & Co NYSE: WFC
Market Reaction Pre-market $50.48 −1.63 (-3.13%)
“Wells Fargo is a wonderful and important franchise that has made some serious mistakes, and my mandate is to make the fundamental changes necessary to regain the full trust and respect of all stakeholders,” Scharf said in a press release. “During my first three months at Wells Fargo my primary focus has been on advancing our required regulatory work with a different sense of urgency and resolve, while beginning to develop a path to improve our financial results.”
The yield the bank earned on assets such as loans dropped to 3.51% from 3.76% in the September quarter, while the rate the bank paid on interest-bearing liabilities such as customer deposits dropped to 1.3% from 1.46%.
During the quarter, the management returned $9 billion to shareholders in the form of dividends and share repurchases.
Wells Fargo received a non-objection to its 2019 capital plan from the Federal Reserve. As part of this plan, the San Francisco-based bank is expected to increase its third quarter 2019 common stock dividend to $0.51 per share, subject to approval by its Board of Directors. This capital plan also includes up to $23.1 billion of gross common stock repurchases, subject to management discretion, for the four-quarter period from the third quarter of 2019 through second quarter 2020.
Wells Fargo is still trying to recover from the fake account scandal surrounding its sales practices, in which employees in its consumer banking division created fake accounts amid a high-pressure sales environment. More issues surrounding the bank’s practices continue to surface. The Fed in February last year barred the bank from growing until it “sufficiently improves its governance and controls.”
Source: WFC, AlphaStreet
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