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Wells Fargo's Scandals Finally Hurt Its Bottom Line (cnn.com)
An anonymous reader quotes CNN:
Wells Fargo said operating losses surged 77% last quarter because of various problems in its auto lending, wealth management, mortgage and currency businesses. Overall expenses rose by 3%. Meanwhile, Wells Fargo said profit declined by 12% during the second quarter, missing Wall Street's expectations. The bank's stock, which has lagged behind the rest of the market, dropped 3% on Friday... Wells Fargo was also hurt by a $481 million income tax bill linked to a recent Supreme Court ruling that allows states to force online retailers to collect sales taxes...
Even though the economy is strong, several crucial metrics at Wells Fargo are shrinking. For instance, average deposits dropped by 2% to $1.3 trillion, led by a drop-off in business from financial institutions. Wells Fargo blamed the decline on actions it had to take due to penalties imposed by the Federal Reserve that prohibit the bank from growing its balance sheet. Lending, the primary way that banks make money, also dipped by 1% from the first quarter at Wells Fargo. It cited declines for commercial real estate and consumer loans, including auto lending. Mortgage banking profits also declined sharply.
If average deposits dropped by 2% to $1.3 trillion -- that looks like a drop of over $26 billion.
CNN reports that an analyst at CFRA Research has downgraded his rating on Wells Fargo -- to "sell."
Even though the economy is strong, several crucial metrics at Wells Fargo are shrinking. For instance, average deposits dropped by 2% to $1.3 trillion, led by a drop-off in business from financial institutions. Wells Fargo blamed the decline on actions it had to take due to penalties imposed by the Federal Reserve that prohibit the bank from growing its balance sheet. Lending, the primary way that banks make money, also dipped by 1% from the first quarter at Wells Fargo. It cited declines for commercial real estate and consumer loans, including auto lending. Mortgage banking profits also declined sharply.
If average deposits dropped by 2% to $1.3 trillion -- that looks like a drop of over $26 billion.
CNN reports that an analyst at CFRA Research has downgraded his rating on Wells Fargo -- to "sell."
If your business model is to screw the customer, then don't be surprised when your customers find different banks.
Some days I get the sinking feeling Orwell was an optimist.
Some GOOD news for once. I wonâ(TM)t start actually celebrating until they start closing locations or their leadership start getting thrown in jail. THEN it will be time to throw a party.
For months Wells Fargo has been trying to hire security professionals in my area. No thanks, I'm not interested in working in that environment. I certainly wouldn't be a customer either.
few know and fewer care. I think they had to stop their shenanigans for a while (they're being watched right now) and it's costing them money. Being good is not as profitable as being evil. That's why we need laws to force companies to be good.
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you're going to have to convince me that this kind of behavior isn't widespread.
Instead of punishing a bank here and there, we should have sent executives to prison for the highway-robbery committed for the subprime scandals and general knavery of '03-'08.
Otherwise they'll just keep doing it and chalk any losses up as a cost of doing business. How much did they make over the years - was it more than they're suffering now? If so I'd say the bean-counters would call it a win and do it again.
WF's only problem is they got caught (like VW). The rest are busy increasing their bribes to the regulators.
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Seriously, many of the American banks, esp. BOA, are controlled by Chinese banks, which are then funneling the money back to China.
With credit unions, they invest into local businesses.
And CUs are not only not raping people over profits, but are fully separate from FDIC, so they can NOT afford to lose money the way that banks do.
I prefer the "u" in honour as it seems to be missing these days.
They even have ads talking about "reconnecting" with their customers. Unfortunately, the connection looks like trying to find another way to drain blood from the turnips they turned their customers into.
There are so many incorrect statements and assertions in this post.
1) "average deposits dropped by 2% to $1.3 trillion" - No, funds on deposit dropped 2%. The average amount in a deposit account did not drop to $1.3 trillion.
2) The operating losses are used as clickbait but are irrelevant in the context of an environment where overall expenses were just up 3%, and the quarter was still profitable.
This snippet should never have been posted.
I don't know if they would expect me to be complicit in criminal acts, but it's clear their corporate culture doesn't have ethics as a top priority.
I'm kind of in an interesting situation. We provide security services to banks and other large businesses. When you see in the news that someone stole $x million from banks, or read about credit card skimmers or whatever, it's my *job* to know how the bad guys do that. In effect, it's my job to know how to steal millions.
One thing I've learned is that crooks don't normally get caught the first time. Or the second or third time. They keep doing it until they eventually get caught. So I've learned that to avoid getting caught, a criminal should do one big theft, once - at most two or three the same day, then stop. Don't keep stealing $12,000 at a time until you get caught. Someone or two big ones and retire.
So here I know *how* to commit crime electronically. I know better than to commit small crimes. So why haven't I stolen $10 million and retired? Only because I'm not a thief. For that reason, I have to make sure I never become a thief. Once, I accidentally took a 25 cent clove of garlic home from the grocery store without paying for it. I had to drive back to the store and pay the 25 cents, because I have to know I'm not a thief, I stick strictly to my moral principles (the best I can). If not, I'm all too likely to try stealing $10 million.
Mom too. Too bad they still own my mortgage, cant do anything about that.
Funny, as we were closing the account with a worker-bee the manager came over to try to talk us out of it; the worker bee stopped typing as they tried to persuade us to stay. Without missing a beat my wife said 'keep typing honey, there's nothing he can say to change our minds.'
Then she said to both of them "I don't know how you can actually chose to keep working here". I was so proud.
I used to say that about Bank of America. Amazingly, Wells is now even worse. I've had my business accounts there for years. It's gotten so bad, I'm pulling the accounts later this year. I hope Wells Fargo goes bankrupt.
Banker >> Cowboy
"Sell" >> "Git Outta Dodge!!!"
> the CEO ultimately resigned.
That's all well and good, but the CEO sets a certain culture for the company. That culture effects everyone, especially management. If ALL the managers who ever talked to the CEO were replaced, you might be able to change the culture fairly quickly.
> round after round of additional ethics training to the point we can all quote it by heart.
Again that's probably not a bad thing. In some companies, the reaction to ethics training is "yada yada yada yeah whatever". In other organizations, people hear of ethical breaches mentioned in ethics training and their reaction is "holy shit someone actually did that?! That's soon fucked up!"
Fuck that company, go die. Currently trying to get rid of a lien on my house from WF. I have NEVER had a loan from WF. Yet there's a lien for non-payment of some bullshit loan. And when I call them to ask about it, they say I cannot discuss it with them because my phone number is not the one they have on file. Well of course it's not, you fuckers, it was never my loan. My lawyer is spinning in circles trying to get rid of this damn thing.
Fuck you Wells Fargo. Go bankrupt already, you fucking scammers.
...because if it weren't, it would have been fined out of existence.
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It gives us one bad actor to direct most of our ire toward, and allows us to postpone for one more day the realization that the entire system is designed to abuse us. I mean, if you or I did what Wells did, or a business we started had done so, we'd be sitting in jail right now. I don't think we'd have an assets left. Bank are allowed to write themselves out of the law, though. Seriously, they can compel binding, confidential arbitration even when a state or federal law has been broken. That Wells has done what it's done, only to see it's profit decline by 12%, would be beyond shocking had we not alread been trained to expect massive profits regardless of what harm a bank has caused consumers. May we all be as fortunate as Wells Fargo, and escape our massive malfeasance with only a 12% decline in profits. "It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning. " -Henry Ford
> Wacovia basically took over Wells Fargo.
Not quite. Wacovia didn't have enough cash or borrowing ability to be able to allow customer withdrawals. The FDIC decided on a Saturday that they would seize Wacovia, taking the assets into receivership, if they didn't have a buyer by 8AM Monday morning. So Wacovia was essentially dead before Wells got involved.
In the second quarter of 2008, Wacovia reported a $8.9 billion loss. Shortly after, the day after WAMU, there was a run on Wacovia, with customers withdrawing over $5 billion in a single day, a Friday. Wacovia would not be able to open again Monday as the existing entity. The FDIC was able to recruit Citigroup to take over Wacovia over the weekend, providing enough cash for Wacovia to be able to open its doors Monday morning. Then Walls Fargo came in.
So no, Wacovia was an empty shell, an utterly failed bank, when Wells Fargo bought the brand and branches. It very much did not take over Wells.
Your opinions are just about as well informed as the "facts" you've based them on.
I'm surprised they have any customers left at all. Why would anyone trust them with anything?
They just make it appear that way, banks always count future money and probable money as if they already have it.
Everytime I hear on the radio "Established in 18blahblah reestablished in 2018" I am reminded that they disctinctly sought to screw customers... its like their attempt at good PR is completely failed.
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