The scandal over Wells Fargo's sales practices didn't appear to have dramatically affected its bottom line as the embattled bank's third-quarter earnings came in ahead of analysts' estimates. Wells reached a $185 million settlement with regulators last month following allegations that its employees opened up to 2 million bank and credit card accounts without their customers' authorization in order to meet sales goals.
Capital levels remained strong in the third quarter, with a Common Equity Tier 1 ratio (fully phased-in) of 10.7%, compared with 10.6% in the same period from previous year.
According to new financial report, Wells Fargo's profits dropped for a fourth straight quarter, with net income falling 3.7 percent since 2015.
Analysts on average had expected the No. 3 US bank by assets to report earnings of $1.01 per share and revenue of $22.21 billion, according to Thomson Reuters I/B/E/S.
A conference call with analysts to discuss the financial results reflected the tricky position Wells Fargo has found itself in: It must appear contrite enough to satisfy its critics while continuing to produce the gangbuster profits that have made it a Wall Street darling.
Earnings per share for the quarter totaled $1.03, beating the $1.01 estimated by analysts who were polled by S&P Global Market Intelligence. Revenue grew to $22.3 billion during the third quarter compared with $21.9 billion during the same period past year. The number of "visits" with bank branch staff - the face-to-face moments where Wells Fargo pushed its employees to sign up customers for as many new products as possible - fell by 10% in September. Total average loans grew 7% to $957.5 billion.
"I am deeply committed to restoring the trust of all of our stakeholders, including our customers, shareholders, and community partners". That drop compares with a 1.4% fall for the KBW Nasdaq Bank index of large commercial lenders over the same period.
The bank is investigating how 2 million accounts were opened without customers' permission.
The company posted $1.03 in earnings per share (EPS) on $22.3 billion in revenue.
Tolstedt announced in July that she would retire from the bank this year and had been expected to leave with as much as $125 million in salary, stock options and other compensation.
Wells Fargo & Co closed down -0.2 points or -0.44% at $45.45 with 2,54,42,608 shares getting traded on Tuesday.
A woman walks past a Wells Fargo branch in Washington, DC. earlier this month. Consumer applications for Wells credit cards also fell sharply in September.
Revenue rose to $22.33 billion.
The bank had announced it had fired some 5,300 mid- and low-ranked employees linked to the bogus accounts, while Stumpf and other executives reaped bonuses for the purported growth in account numbers.