Wells Fargo misses on earnings in its first full quarter since its accounts scandal

Wells Fargo missed on earnings in its first full quarter since its fraudulent accounts scandal.

The bank reported earnings per share of $0.96, lower than analysts expectations of $1.00 and revenue of $21.58 billion, also missing projections of $22.45 from analysts.

The fourth quarter is the first full quarter since Wells Fargo's fraudulent accounts scandal came to light. In September, the bank settled with regulators for opening as many as two million retail checking and credit card accounts without the knowledge of customers going as far back as 2011.

Following the revelation, now former CEO John Stumpf faced two congressional hearings and eventually stepped down, replaced by long-time Wells director Tim Sloan. Additionally, the bank has faced allegations of unfair practices towards employees who tried to report the fraudulent behavior and revelations that the fake accounts practice may have started much earlier than 2011.

Wells has taken steps to correct the problem, including eliminating sales goals for its retail banking employees, refunding costs of anyone who had an account opened without their knowledge, and a press campaign to rehabilitate their image.

Despite this, Wells has seen new account openings decline significantly in the months since the scandal came to light, falling 44% year-over-year in October and 41% year-over-year in November.

RELATED: Wells Fargo's CEO and other executives who got the golden ax

Wells Fargo's CEO and other executives who got the golden ax
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Wells Fargo's CEO and other executives who got the golden ax

Roger Ailes, $40 million

POSITION: Chairman, Fox News

WHAT: Sexual harassment claims and a lawsuit alleged that Ailes demoted and fired female anchors and other employees who rejected his overtures.

WHERE ARE THEY NOW: Ailes has been advising Donald Trump's presidential campaign.

Image: REUTERS/Fred Prouser/File Photo

Jeff Smisek, $29 million

POSITION: CEO, United Airlines

WHAT: A federal investigation found the airline had added back a money-losing flight between Newark and Columbia, South Carolina. An official with Port Authority, which oversees Newark airport, happened to own a weekend house near Columbia, and had whinged about the flight being dropped.

WHERE ARE THEY NOW: Smisek's initially reported severance of $8.4 million was later found out to be $20 million higher, on the condition that he cooperated with investigators following his resignation.

Image: REUTERS/Shannon Stapleton

Robert Willumstad, turned down $22 million


WHAT: His firm sold financial instruments that underpinned the mortgage bubble and was bailed out by the government in the 2008 crash. In a marked contrast to other ousted execs, Willumstad wrote in a letter to his successor, "I prefer not to receive severance payments while shareholders and employees have lost considerable value in their AIG shares."

WHERE ARE THEY NOW: Willumstad is an adviser to a private equity firm he founded in 2007, and chairman of the board of trustees of Adelphi University, which named its business school after him, following his $9.5 million donation. 

Image: Andrew Harrer/Bloomberg via Getty Images


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