Wells Fargo's numbers are still horrible, but they're getting better

Wells Fargo (WFC) provided a glimpse into its retail banking activity since being rocked by a scandal last fall involving as many as 2 million fraudulent accounts opened without customers’ permission.

In its first-quarter earnings announcement, the bank noted improvements in customer activity in its retail banking operations each consecutive month in 2017. However, business is still down in some areas compared to the same period a year ago before the scandal broke.

Total branch interactions were up 13% in March compared to February, but down 4% compared to March 2016. Teller transactions, branch banker interactions, and consumer checking account opens were all down compared to March 2016.

New customer credit card applications were up 22% in March compared to February, but down 42% compared to March 2016.

Customer loyalty and overall satisfaction improved each month in 2017, with customer loyalty scores coming in at 57.9% in March 2017, but down 62% compared to March 2016.

Here are the two key slides from Wells Fargo tracking the performance of various businesses (Annotation ours):

On September 8th, Wells Fargo (WFC) was fined $185 million after regulators learned employees at the retail bank opened up the bogus accounts to meet sales targets. The bank fired more than 5,000 employees tied to the scandal.

The bank saw a steep drop in consumer checking account openings and new credit card openings in the month of September.

Soon after, John Stumpf, a 35-year veteran at the bank, retired as chairman and CEO. Tim Sloan, the company’s COO, took over as the CEO.

Sloan noted that the bank is making “meaningful progress” in the earnings announcement.

“Wells Fargo continued to make meaningful progress in the first quarter in rebuilding trust with customers and other important stakeholders, while producing solid financial results. We have taken significant actions throughout the company to date and we are committed to building a better bank as we move Wells Fargo forward.”

Wells Fargo got rid of its sales goals and changed how it compensates its retail bankers. More than $180 million was subsequently clawed back from senior leaders. The bank also added a new ethics office.

“While we have more work to do, I am pleased with all we have accomplished thus far. Our 273,000 team members have remained committed to helping our customers succeed financially, as reflected in improved retail customer service scores, record levels of deposits, more primary consumer checking customers, record client assets in Wealth and Investment Management, and industry-leading mortgage originations,” Sloan added.

Wells Fargo reported earnings per share of $1, compared to estimates of 97 cents. Revenue came in at $22 billion, down 0.9% a year ago.

Shares of Wells Fargo dipped 1.64%, or down 87 cents, to last trade around $52.25 in the pre-market.


Julia La Roche is a finance reporter at Yahoo Finance. Follow her on Twitter.

Read more:

Advertisement