Wells Fargo & Co. said that fourth-quarter profit fell 53% as the bank set aside more money to resolve issues tied to its sales-practices
scandal. 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 $19.86 billion was down from $21 billion a year ago. Analysts had expected $20.1
billion. Wells Fargo shares fell 3.3% to $50.40 in premarket trading. The lender took a financial hit related to the fake-account scandal
that has dogged the bank since 2016. Wells Fargo booked a $1.5 billion charge for legal costs related to the long-running sales-practices
problems. The bank has said it is in talks to settle a joint Justice Department and Securities and Exchange Commission probe into the matter.
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. Behind the scenes, Wells Fargo’s
business lines have also been struggling. Revenue declines have forced the bank to refocus on cutting costs. The bank’s expenses rose 17% to
$15.6 billion from $13.3 billion a year ago. Reflecting the cost of litigation, the bank’s full-year expenses of $58.2 billion missed the
company’s target of about $53 billion.
By Vincent Mivelaz
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