Wells Fargo beats on earnings despite accounts scandal

Wells Fargo beat on its first earnings since being rocked by its fraudulent-accounts scandal.

The bank on Friday reported revenue of $22.3 billion and earnings per share of $1.03.

Analysts expected the bank to report earnings per share of $1.01 and revenue of $22.22 billion.

The bank also said CEO John Stumpf would get no bonus after his retirement from the bank, announced on Wednesday.

Stumpf is being replaced by former COO Tim Sloan, who has been with the bank for 29 years.

The bank also announced that Stumpf and Carrie Tolstedt, the bank’s former head of community banking who was responsible for the division in which 2 million accounts were found to be created under customers’ names without their knowledge, would forfeit all of their unvested stock awards.

“I am deeply committed to restoring the trust of all of our stakeholders, including our customers, shareholders, and community partners,” Sloan said in a release accompanying the earnings announcement.

“We know that it will take time and a lot of hard work to earn back our reputation, but I am confident because of the incredible calibre of our team members. We will work tirelessly to build a stronger and better Wells Fargo for generations to come.”

The bank said primary consumer customers increased 4.5% in September over the same month last year, and checking consumer increased by 4.7% for the whole quarter compared with the third quarter of 2015.

The bank’s cross-selling ratio — the number of Wells Fargo financial products each customer has open with the bank — declined in the third quarter to 6.25 products per household on average from 6.33 in the year before.

Cross-selling has come under fire after being touted repeatedly by Wells executives in previous years. Lawmakers said the emphasis on opening new products for customers led employees to feel pressured and, eventually, to open the fraudulent accounts. The bank did away with sales incentives as of October 1.

The continued increase and seeming lack of impact on the bank comes as no surprise. Though the bank paid a $185 million settlement with regulators and lost business from the governments of California and Illinois after the scandal broke in early September, Wells executives said in a leaked conference call on Tuesday that the scandal had not substantially affected the bank’s business.

Bank earnings started strong on Friday, with JPMorgan reporting earnings of $1.58 a share, much higher than estimates of $1.39 a share. Citi also beat on earnings.

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