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Profits dip at Wells Fargo as it deals with departure of boss John Stumpf

Caitlin Morrison
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Wells Fargo Reports 11 Percent Drop In Quarterly Earnings
Wells Fargo has been shaken by scandal in recent months (Source: Getty)

Wells Fargo has revealed profits dipped during the three months to the end of September, in a week that's seen its chief exec John Stumpf make a dramatic departure.

The figures

Net income was down to $5.64bn (£4.6bn) from $5.8bn last year, and earnings per share dropped to $1.03 from $1.05.

Revenues rose to $22.3bn from $21.9bn - beating expectations of $22.2bn.

The bank said total average loans rose seven per cent to $957.5bn from $895.1bn in the third quarter of 2015.

Why it's interesting

Wells Fargo has been struggling to deal with the fallout from a sales scandal that has resulted in a $185m fine, the loss of 5,000 employees - and the departure of the bank's boss.

Stumpf quit the role on Wednesday, succumbing to the pressure that had been building in the wake of an investigation into whether Wells Fargo employees had opened as many as two million unauthorised accounts.

The scandal also led to pressure on Fed chief Janet Yellen to break up the lender.

What Wells Fargo said

“Wells Fargo reported solid results for the third quarter, reflecting the benefits of our diversified business model, our strong balance sheet and improved credit performance," said finance chief John Shrewsberry.

"Revenue increased linked quarter on higher net interest income, driven by growth in earning assets and increased investment in our securities portfolio, as well as solid mortgage banking results.

"While expenses increased from second quarter, credit results improved from the prior period led by strong performance in consumer real estate and improvements in our oil and gas portfolio."

Shrewsberry added: "We will continue to monitor impacts from the recent sales practice settlements to our business activity levels."

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