The following article, originally published at 8:29 a.m. on Friday, Jan. 13, 2017, has been updated with comments from analysts and executives.
Wells Fargo (
Earnings of 96 cents a share at the San Francisco-based bank compared with the $1 average of estimates compiled by FactSet and profit of a $1.03 a year earlier. Revenue of $21.6 billion in the three months through December trailed projections of $22.4 billion, though it was in line with last year's numbers.
Net income in community banking, the company's largest business, fell 14% from a year earlier to $2.7 billion as consumers opened 40% fewer checking accounts in December alone, and credit-card applications declined 43%. Wells Fargo, which prided itself under former CEO John Stumpf on convincing checking account-holders to add additional services, has struggled with the revelation last fall that employees trying to meet ambitious sales targets opened as many as 2 million unauthorized customer accounts.
The bank admitted it had fired as many as 5,300 people for the practice over a five-year period, and Stumpf abruptly retired after contentious questioning in two Congressional hearings. In addition to a $185 million...