Wells Fargo shows some stability, resumes promoting accounts
Wells Fargo’s sales practices scandal isn’t going away anytime soon, with first-quarter profit essentially flat as the bank struggled to win customers. But amid signs that the storm over fake accounts is easing, branch employees are starting to promote new accounts to people.
The company said that new checking account openings were down 35 percent in March from the same month a year ago. New credit card applications were down 42 percent. Both those metrics improved from the activity in February, however.
And after months of apologizing and calling customers to ask whether they really opened the accounts in their names, Wells executives said the bank is starting to move back into the offense.
Bank employees are “more actively marketing products” to customers again in the branches, said John Shrewsberry, the company’s chief financial officer. Regulators had fined San Francisco-based Wells Fargo $185 million in September for opening more than 2 million accounts fraudulently as employees tried to meet aggressive sales goals. The bank has been dealing with the aftermath since then, as thenCEO John Stumpf stepped down and the head of the consumer banking division moved up her retirement. Both were ordered to forfeit promised stock awards. Wells Fargo also scrapped its sales goals and announced new compensation standards.
Earlier this week, the bank’s board released its own investigation, and announced it was clawing back another $75 million in pay from Stumpf and former community bank executive Carrie Tolstedt, saying the executives took too long to recognize problems at the company. —AP