Wells Fargo Swings to First Loss in More Than a Decade -- Update
July 14 2020 - 8:48AM
Dow Jones News
By Ben Eisen
Wells Fargo & Co. posted its first quarterly loss in more
than a decade as it socked away money to prepare for a wave of
soured loans.
The San Francisco-based bank lost $2.38 billion in the second
quarter, compared with a profit of $6.21 billion a year earlier, as
the novel coronavirus continued to pummel the economy. It was the
bank's first loss since the fourth quarter of 2008 and just its
third loss of this century.
The bank lost 66 cents per share. Analysts polled by FactSet had
expected a loss of 16 cents.
Revenue of $17.84 billion was down 17% from $21.58 billion a
year earlier.
The lender has been hit hard by the economic collapse resulting
from the coronavirus pandemic, which has forced many consumers and
businesses to seek reprieve on their debt payments.
Wells Fargo set aside $9.57 billion to cover potential loan
losses in the second quarter on top of the $3.83 billion it set
aside in the first quarter.
When the pandemic hit, Wells Fargo was already struggling to
overcome a four-year-old fake-accounts scandal that has weighed on
its business lines. The bank brought in CEO Charles Scharf last
fall to help improve its reputation and get businesses back on
track. He has prioritized resolving outstanding regulatory issues
and restructuring the business lines.
Bowing to the profit pressure, the bank also said it expects to
cut its quarterly dividend to 10 cents from 51 cents, subject to
approval by its board of directors. The Federal Reserve told banks
last month that they couldn't pay out dividends in excess of their
average profits over the last four quarters, causing Wells Fargo to
say it would trim its dividend.
Write to Ben Eisen at ben.eisen@wsj.com
(END) Dow Jones Newswires
July 14, 2020 08:33 ET (12:33 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
Wells Fargo (NYSE:WFC)
Historical Stock Chart
From Mar 2024 to Apr 2024
Wells Fargo (NYSE:WFC)
Historical Stock Chart
From Apr 2023 to Apr 2024