Wells Fargo Reports Falling Profit
October 15 2019 - 8:46AM
Dow Jones News
By Rachel Louise Ensign
Wells Fargo & Co. said Tuesday that third-quarter profit
fell.
Quarterly profit at the San Francisco-based bank was $4.61
billion, compared with $6.01 billion a year ago. Per share,
earnings were 92 cents. Analysts polled by FactSet had expected
$1.24 per share.
Third-quarter revenue was $22.0 billion, up from $21.9 billion a
year ago. Analysts had expected $21.09 billion.
The company took a $1.6 billion charge for legal costs related
to its long-running sales-practices scandal, but also had a $1.1
billion gain related to the sale of a business.
The bank announced last month after a six-month search that it
would hire Bank of New York Mellon Corp. CEO Charles Scharf as
chief executive. He will be tasked with restoring the bank's
battered reputation and improving its standing with regulators. He
starts next week.
The bank's 2016 fake-account scandal badly damaged its
reputation and led to a morass of regulatory problems. Wells
Fargo's key business lines also have struggled in recent years.
What was once an aggressive, fast-growing lender whose profit
towered above those of rivals has become a firm with sluggish
revenues that is leaning heavily on cost cuts.
The bank now must also contend with falling interest rates,
which hurt profit. The Federal Reserve cut rates twice in the third
quarter.
Net-interest income fell 8% in the third quarter from a year
earlier.
Write to Rachel Louise Ensign at rachel.ensign@wsj.com
(END) Dow Jones Newswires
October 15, 2019 08:31 ET (12:31 GMT)
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