Remember the havoc when consumers found out Wells Fargo was opening accounts without their knowledge? Well it’s been six months since Wells Fargo’s consumer banking scandal, and the bank is slowly showing signs of improvement.
February customer activity and retail banking data show that trends have generally stabilized for the bank, although Wells Fargo continues to show weakness in checking account and consumer credit card applications.
“After factoring in day count differences, February trends were generally similar to January’s and were within our expectations,” said Mary Mack, Wells Fargo’s head of Community Banking, in a press release.
In an effort to be more transparent since thousands of bank employees were fired for allegedly creating accounts for consumers who never asked for them, the bank has been giving monthly investor updates on its retail banking customer activity.
On a conference call following the release of the results, Mack acknowledged that the number of new credit card applications has not improved since stabilizing in October, but also emphasized that customers still opened more checking accounts than they closed in February.
Also on the call, Wells Fargo CFO John Shrewsberry noted that a number of the bank’s metrics were improved compared with a year ago, including deposit and credit card balances, and transaction volumes from debit and credit cards.
Tim Sloan, who took over as CEO in October, told CNBC on Friday that the bank is working hard to regain customer’s trust and is focused on improving its monthly metrics.
“What you see in that monthly update is that our checking account growth, primary checking account growth, a customer that’s calling us their primary bank, is growing at about 1 percent year-over-year,” Sloan said. “Pre-crisis, we were in an environment where we were growing at about 4 percent. We’re going to work very hard to get back to those levels. It’s not going to happen immediately, but over time, we are.”
Mack echoed Sloan’s sentiment, saying it will still take time to work through the changes that are being made in the business, but that “we remain focused on strengthening our relationships with existing customers and building new ones with potential customers.”
The Wells Fargo Board is conducting an independent investigation into the bank’s sales practics and has taken several actions since initiating that examination — including implementing a new incentive compensation plan, firing four current and former managers in the Community Bank unit, and withholding 2016 bonuses and up to 50-percent reductions of 2014 performance shares for eight current Operating Committee members, including CEO Sloan.
The full results of the examination are due prior to the annual shareholder meeting on April 25.