Wells Fargo Reports Slight Drop in Profit

Industries Reuters

(REUTERS)

Wells Fargo & Co, which has been mired in litigations stemming from a sales scandal, reported a 0.6 percent fall in quarterly profit on Thursday, hit by weaker mortgage banking fees and higher costs.

Continue Reading Below

The third-largest U.S. bank by assets said net income applicable to common shareholders fell to $5.06 billion, or $1.00 per share, in the first quarter ended March 31, from $5.09 billion, or 99 cents per share, a year earlier.

Analysts on average had estimated earnings of 96 cents per share, according to Thomson Reuters I/B/E/S. It was not immediately clear if the reported figures were comparable.

Wells Fargo has been dealing with multiple lawsuits and regulatory inquiries since government investigations found in September that some of its employees had opened as many as two million accounts without customers' knowledge.

The scandal damaged the bank's folksy image and also led to the ouster of Chief Executive John Stumpf, but growing deposit balances and a stable level of account closings show that profitability in the long run should not be hampered.

The company has been reporting customer activity in its branch banking unit on a monthly basis ever since the scandal, in an effort to be transparent with investors and to win back their trust.

Continue Reading Below

Wells Fargo's total revenue fell 0.9 percent to $22 billion. (Reporting by Nikhil Subba in Bengaluru and Dan Freed in New York; Editing by Saumyadeb Chakrabarty)

What do you think?

Click the button below to comment on this article.