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Wells Fargo reports higher profits, flat revenue amid CEO search

Wells Fargo reports higher profits, flat revenue amid CEO search

Wells Fargo

Wells Fargo has been in a multi-year attempt to turn itself around after years of scandals in nearly every part of its business.

Wells Fargo reported higher profits but flat revenue in the second quarter of 2019 as the bank works to combat public scrutiny over a series of scandals.

The bank topped analysts’ estimates, reporting a profit of $6.2 billion in the second quarter of 2019, a 19% increase from the previous year. But its revenue of $21.6 billion stayed the same.

But the bank’s net interest income, which includes the interest banks charge on assets like loans, fell by $446 million. In its earnings report, the bank said higher deposit costs and lower interest rates played a role in the decline.

Wells Fargo’s troubles started in 2016, with accusations that its employees opened millions of unauthorized customer accounts to reach aggressive sales goals. The bank has disclosed more customer harm since then, in areas such as mortgage and auto lending, foreign exchange, wealth management and add-on products like identity theft protection.

The bank is still under a Federal Reserve cap that limits its growth.

Tim Sloan, who was promoted amid the 2016 scandal, stepped down as CEO and president of the bank in March. The bank’s board named general counsel Allen Parker as interim CEO and president.

Wells Fargo is headquartered in San Francisco, but maintains its largest hub in Charlotte, where it employs around 25,700 in the region.

On a call with analysts, Parker said the sale of its Charlotte-based institutional retirement and trust business to an Iowa-based firm was completed July 1. The bank announced the sale of the business in April, as it works to shed costs. The business employed around 800 in the Charlotte area at the time of the sale.

On the call, Parker pointed to several metrics he said show the success of the company’s transformation.

Primary consumer checking customers, or those who actively use their checking account with transactions like debit card payments and online purchases, grew by 1%. Two questions on a branch customer service survey reached their highest level in three years.

“While there’s a lot of hard work that still needs to be done, I’m confident and optimistic that we’re taking the right steps to build an extraordinary financial institution,” Parker said.


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