Wells Fargo blames COVID-19 and Fed rules, but also itself for disappointing results

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MarketWatch– “Shares of Wells Fargo & Co. closed Tuesday down nearly 5%, but well off the day’s worst levels after the bank reported a wider-than-expected second-quarter loss and said it was cutting its quarterly dividend by 80%.”
“Wells Chief Executive Charles Scharf said on the post-earnings conference call with Wall Street analysts that the effect of the COVID-19 pandemic on consumers and the overall economy “substantially impacted” results, as it led to the bank adding $ 8.4 billion to the allowance for credit losses.”

“Scharf said the asset cap placed on the bank by the Federal Reserve also hurt, as the bank couldn’t grow its balance sheet to offset the lower interest rate environment, which led to a 13% drop in net interest income.”

 

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