Towards the close of 2016, Wells Fargo faced an unprecedented scandal when an investigation determined that bank employees created millions of unauthorized—fake–bank accounts in the names of customers in order to reap various rewards. The probe resulted in fines, of course, but more importantly, the company’s long-standing reputation has fallen from grace.
As such, Wells Fargo has had quite a difficult year. The bank has reported lower than expected sales and profit numbers in the fourth quarter, with revenue reaching approximately $21.6 billion. While this is certainly in line with the revenue from 2015 it is lower than analyst expectations of $22.5 billion. Similarly, net income for the fourth quarter came in at $5.3 billion, which is actually down from the $5.6 billion reported last year. This is the equivalent of investors earning 96 cents per share instead of $1.00.
Now, the bank has attributed this drop in lower net fourth-quarter income to a massive $592 million loss from net hedge accounting losses which the company claims was due to a “sharp increase in certain interest rates and foreign currency fluctuations.”
“We continued to make progress in the fourth quarter in rebuilding the trust of our customers, team members and other key stakeholders,” explains Wells Fargo CEO Tim Sloan. “I am pleased with the progress we have made in customer remediation, the ongoing review of sales practices across the company and fulfilling our regulatory requirements for sales practices matters.”
He goes on to say, “While we have more work to do, I am proud of the effort of our entire team to make things right for our customers and team members and to continue building a better Wells Fargo for the future.”
In addition, Wells Fargo head of community Mary Mack comments, “We know we have more work ahead of us and we remain focused on strengthening our relationships with existing customers and building new ones with potential customers.”
Looking forward, the bank has announced plans to introduce new features in an attempt to restore membership. This includes a new “mobile transaction plan” that will allow for customers to withdraw cash from all of the institution’s 13,000 ATMs without having to use their debit card. They also are planning a new mobile banking app feature that will give users an eight-digit code to enter into ATMS along with their PIN to access cash.