Wells Fargo reported Monday on February customer activity in its branches. The San Francisco-based bank has been making the monthly disclosures to investors since news erupted in September of its sales scandal.
Wells Fargo reported Monday on February customer activity in its branches. The San Francisco-based bank has been making the monthly disclosures to investors since news erupted in September of its sales scandal.

Bank Watch

News and notes on Charlotte's banks and the financial industry

Bank Watch

More fallout for Wells Fargo over sales scandal: Branch activity falls again

March 20, 2017 11:34 AM

Wells Fargo disclosed Monday its customer activity fell again in February compared with the same month last year, as the San Francisco-based bank posted fresh declines following its September sales scandal.

The bank’s latest monthly retail banking report to investors also showed a 55 percent slump in consumer credit card applications from a year earlier. That’s the biggest drop in that area since the bank was fined $185 million over claims employees opened millions of deposit and credit card accounts customers may not have authorized as they pushed to meet high-pressure sales goals.

In a conference call Monday to discuss the February numbers, executives noted areas of improvement, such as customer survey scores that have now risen for four months in a row, as well as higher consumer and small-business deposit balances.

But it remains unclear when the third-largest U.S. bank by assets will fully reverse its downward trends, which persist even after steps Wells has taken to rebuild trust with customers, such as eliminating product sales goals last October.

“We have more work to do, and the changes we have made will take time to be reflected in our results,” Mary Mack, Charlotte-based head of community banking, said on the call.

The new declines could fan concerns investors have already expressed about whether drops in the rate of new account openings will harm the bank’s ability to grow future revenues.

On Monday, one analyst asked executives how Wells’ regulatory expenses might be affected this year by the bank’s ongoing probes into the scandal. Chief Financial Officer John Shrewsberry, citing a previously disclosed figure, said Wells continues to expect to spend $40 million to $50 million per quarter for third parties such as lawyers and consultants to conduct reviews of its sales practices.

In other findings from February’s report, Wells saw an 11 percent year-over-year drop in branch interactions, a measure that includes teller transactions and branch banker interactions. In providing the figures, Wells noted this past February had one less day than February 2016.

Consumer checking account openings declined 43 percent, extending a trend stretching back to September. In the near term, Mack said such declines are expected to drive a trend of declining year-over-year growth in the bank’s primary consumer checking account customers.

But Mack also said customers still opened more checking accounts in February than they closed. And, she said, customer departure rates are back to pre-scandal levels.

Deon Roberts: 704-358-5248, @DeonERoberts

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