Wells Fargo CEO: 'No stone unturned' to make bank better
Wells Fargo posted fourth-quarter earnings Friday that missed on the top and bottom lines. Shares rose, though, as the company CEO promised to keep working to restore the scandal-plagued company's image.
The San Francisco-based institution saw profit of 96 cents per share against estimates of $1 from analysts surveyed by Reuters. That represented a 6.8 percent decline from $1.03 per share from the same period in 2015. Revenue was $21.58 billion against Wall Street estimates of $22.451 billion.
The bank is coming off one of the most difficult years in its 165-year history . Regulators fined Wells Fargo in 2016 for creating false accounts for some 2 million customers. In addition to the scandal, which involved a process known as cross-selling, the bank also failed its "living will" test with the Fed.
Company CEO Tim Sloan said the company continues to work to rehabilitate its image.
"We are leaving no stone unturned so that we can emerge from this a better, stronger company," Sloan said on a conference call with analysts.
Among the big changes the company has outlined and Sloan discussed Friday: Raising the fee reimbursement level to customers from $2.6 million to $3.2 million and raising the minimum wage for employees to up to $17. The company also has eliminated individual sales goals in favor of store-wide standards.
"We want to identify anyone who was negatively impacted so we can make things right," he said.
Bank stocks in general received a postelection boost but have struggled lately. Wells shares have fallen 1.1 percent in 2017.
Net interest margin for Wells grew to 2.87 percent, just ahead of Wall Street expectations. The bank attributed the gain to growth in loans, investment securities and trading assets, as well as help from higher interest rates. Following June's Brexit vote, rates have been on a steadily higher trajectory, benefiting financial institutions.
Return on equity also was solid at 11.49 percent compared to the 10 percent cost of capital benchmark.
The bank reported $12.5 billion returned to shareholders through dividends and share buybacks.
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