Wells intentioned

14 January 2020 By John Foley Follow @johnsfoley

The troubled bank’s dismal earnings show how much work lies ahead for new boss Charlie Scharf, especially with expenses at least $10 bln too high. Slashing those and smartly growing its tiny credit-card unit while dealing with a deposits price war could put Wells in decent shape.

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Wells Fargo on Jan. 14 reported $19.9 billion of revenue for the fourth quarter of 2019, around 5% less than the same period a year earlier. The bank also took a $1.5 billion charge relating to past conduct issues, including potential lawsuits over its creation of millions of fake bank accounts.

Charlie Scharf, who took over as chief executive on Oct. 21, said in a call with analysts that there was no reason Wells Fargo could not have “best-in-class” efficiency levels. In the last three months of the year expenses ate up 79% of revenue, compared with 64% a year earlier.

Diluted earnings of 60 cents per share compared with the mean estimate of sell-side analysts of $1.12 per share, according to Refinitiv, and were half the level of a year earlier.

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Diluted earnings of 60 cents per share compared with the mean estimate of sell-side analysts of $1.12 per share, according to Refinitiv, and were half the level of a year earlier.

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