Wells Fargo & Co. was relatively calm in the resolution of the customer scandals during the third-quarter earnings report on Friday.
Timothy Sloan, the chief executive of the bank, focused primarily on the risk management measures taken
The scandal surfaced in September 2016, causing John Stumpf to resign as Chairman and Chief Executive a month later
only monetary mention in connection with the scandal in the press release and the supplemental data resulted in $ 605 in expenses related to reorganization costs "for a variety of matters, including an additional provision of $ 241
The scandal and the bank's selling practices have been investigated by US consumers Bureau of Financial Protection, US Department of Justice, Securities and Exchange Commission, US Department of Labor, various prosecutors ys General and Congress.
Sloan reiterated earlier comments on Friday that the bank "expects to operate in the first part of 2019 as part of the Capital Limit of the Consent Regulation."
"We are in constructive dialogue with our regulators and we" are providing detailed feedback and enterprise-wide changes, especially in the risk management structure, "Sloan told analysts.
Sloan said the main source of revenue for the scandal was State and Institutional Wholesale Banking.
"It's a bit more politically charged environment in terms of how we compete, and reputation issues have made it harder for this team," Sloan said. "There are a few in some others Wholesale categories, a little headwind.
"The total number and performance this quarter, you see some improvement with these reputation issues."  On September 1, 2017, the bank confirmed there were at least 3.53 million check and credit card accounts affected by its fraudulent account scandal were. Although most of these accounts were created in Arizona and California, the bank said it could not be ruled out that 38,722 were formed in North Carolina and 23,327 in South Carolina.
Motley Fool analyst Matthew Frankel said on Friday that a flat third quarter Performance – if one does not take into account the lowering of the federal's performance and cost-cutting efforts – was encouraging, as "Wells Fargo has been joined by a number of recent years Scandals and punishments are shattering, and his latest results have been, to say the least, disappointing. "
" Of course, all Wells Fargo investors would like to see improved efficiency and profitability. "
" But those are not the most important things to look forward to Instead, Frankel said the top of the list of analysts and investors "determines whether the bank's scandals will lead to business losses – as has happened in recent quarters – or if things are going too well stabilize or even begin to improve. "
" Against this background, the results look quite positive. "
Frankel cited as an example that the bank had increased the account customers by 1.7 percent last year, lending to auto and small businesses increased by 10 and 28 percent, respectively, the equity base rose 16 percent year-on-year, and Personal loans and credit lines also rose.
"Deposits and loans are still down year-on-year, but both have fallen less than 0.5 percent since the second year," said Frankel, "and to be fair, the bank is unable to concentrate on expanding their assets with the punishment of the Fed.
"Remember … until the bank in the eyes of the Fed achieved satisfactory improvements The penalty is lifted, the upside potential of the bank is limited for the time being."
The bank has set itself the goal of spending to reduce by $ 4 billion by the end of 2019. Cost-cutting areas include marketing, finance, human resources, operations, technology, data and contact centers
The number of full-time and full-time equivalent jobs decreased by 2,800 from the second quarter to the third quarter. The workforce has decreased by 8,900 full-time employees to 261,700 or 3.4 percent since June 30, 2017.
On September 20, the bank announced plans to reduce its total workforce by 5 percent to 10 percent or around 13,000 26,500 jobs within three years
The bank has closed in the quarter 93 stores and plans for the 2018 fiscal year the closure of at least 300 branches. By the beginning of 2022, 900 branches will be closed.
Kenneth Leon, an analyst with CFRA Research, said third quarter performance is proof that "Wells Fargo is missing market opportunities with damage to its brand in the consumer unit and a conservative approach to commercial lending."