Wells Fargo profits stay flat as it makes "meaningful progress" to rebuild trust after its account-opening scandal

Courtney Goldsmith
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Wells Fargo said it has made progress on rebuilding trust with customers and investors (Source: Getty)

Wells Fargo, the US' third-largest bank, said profit remained flat in the first quarter of 2017 while it made progress on rebuilding trust with customers and investors after a sales scandal.

The figures

The lender reported net income of $5.5bn (£4.4bn) for the quarter to 31 March, which was flat compared with the previous year.

Diluted earnings per share increased to $1.00, up from $0.99 in the first quarter of 2016.

The company's total revenue was down slightly from $22.2bn in 2016 to $22bn, which was lower than forecasts.

Why it's interesting

Unlike rivals JP Moragan and Citigroup, which today boasted growing profits in their quarterly results, Well Fargo's account opening scandal is still weighing on the bank's performance.

John Stumpf quit as chief executive in October in the wake of the investigation into claims that the bank's employers opened as many as two million unauthorised new accounts using current customer names.

The firm is still cleaning up the mess. It agreed to pay $110m in a settlement of a customer lawsuit in March, and in September the bank paid $185m to settle regulatory charges and sacked over 5,000 employees.

What Wells Fargo said

Chief executive Tim Sloan said Wells Fargo made "meaningful" progress in the first quarter to rebuild trust with customers and important stakeholders.

We have taken significant actions throughout the company to date and we are committed to building a better bank as we move Wells Fargo forward. Earlier this week, the independent directors of Wells Fargo’s board of directors issued a report on their investigation into the company's retail banking sales practices. The findings are valuable to us and beneficial in helping to identify areas for further improvement.

While we have more work to do, I am pleased with all we have accomplished thus far. Our 273,000 team members have remained committed to helping our customers succeed financially, as reflected in improved retail customer service scores, record levels of deposits, more primary consumer checking customers, record client assets in wealth and investment management, and industry-leading mortgage originations

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