Wells Fargo opens fewer accounts after scandal, but deposits still climb
Wells Fargo & Co. brought in fewer new customers and saw more existing ones close their accounts in October, the first full month since the San Francisco bank’s sales scandal came to light.
The bank reported Thursday that it opened about 300,000 new checking accounts last month, down 27% from September and down 44% from October 2015. There also was an uptick of 3% in the number of customers who closed their checking accounts compared with both months.
For the record:
4:30 p.m. May 3, 2024An earlier version of this story said Wells Fargo’s settlement with regulators totaled $185 billion. In fact, it totaled $185 million.
Wells Fargo’s credit-card business saw an even sharper decline, with the number of applications for credit cards falling 35% compared with September and 50% compared with October of last year.
The bank acknowledged that the decline was the result of “customer reaction to the sales practices settlement.”
What’s more, customers who have stayed with Wells Fargo now say they are less satisfied and less loyal. The bank reported a customer loyalty score, based on internal surveys, of 52.3% in October, down from 61.2% in the same month last year.
“We do have a lot of work to do to bring these scores back to pre-settlement levels as we focus on rebuilding confidence and trust with our customers,” said Mary Mack, the new head of community banking, during a conference call Thursday.
On Sept. 8, regulators announced that they had reached a $185-million settlement with Wells Fargo over what officials described as an out-of-control sales culture that drove thousands of bank workers to open as many as 2 million accounts for customers without their authorization.
Though Thursday’s report indicates that the scandal has crimped the bank’s business, that impact has by some measures been small.
Despite the slowdown in customer growth and uptick in account closures, the bank reported that customers spent more money and made more transactions with their Wells Fargo debit and credit cards in October compared with September and October of last year.
The bank ended the month with $745 billion in consumer and small-business deposits, down less than 1% since September and up 7% since last year.
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