Wells Fargo thinks it has paid back customers as required

Fri Jan 13, 2017 3:17pm EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Dan Freed and Michael Erman

(Reuters) - Wells Fargo & Co (WFC.N: Quote), the third-largest U.S. bank by assets, said on Friday it believes it has reimbursed the customers it needs to in order to comply with at least one of three settlements over a bogus-accounts scandal.

"We've accomplished a lot over the past few months but we still have a lot of work to do ... to rebuild trust with our customers, team members, and other key stakeholders," CEO Tim Sloan said during a call with analysts.

The San Francisco-based bank has been dealing with multiple lawsuits and a sharp drop in account openings after it settled with the Los Angeles City Attorney, the U.S. Comptroller of the Currency and the Consumer Financial Protection Bureau in September over charges that its employees created as many as 2 million accounts without customers' consent.

Chief Executive Sloan - who took over after John Stumpf resigned in the wake of the scandal - said he was pleased with the progress the bank has made in customer remediation, as well as its ongoing review of sales practices across the company.

The bank disclosed the new details as it posted its fifth straight decline in quarterly earnings on Friday, results that diverged from rivals JPMorgan Chase & Co (JPM.N: Quote) and Bank of America Corp (BAC.N: Quote). Both posted significantly higher earnings on Friday on the back of higher interest rates and market gains since the U.S. election in November.

Wells Fargo's net income applicable to shareholders fell 6.4 percent to $4.87 billion, or 96 cents per share, in the fourth quarter, from $5.20 billion, or $1.00 per share, a year earlier.

It said it has made $3.2 million of refunds for potentially unauthorized accounts that incurred fees and charges, which it believes fulfills its repayment requirements under the settlement to the L.A. City Attorney.

But L.A. City Attorney Mike Feuer said it was "too soon to say that all affected Wells Fargo customers have been made whole."   Continued...

A Wells Fargo logo is seen in New York City, U.S. January 10, 2017. REUTERS/Stephanie Keith