Its reputation tarnished by revelations that employees opened roughly 2 million phony accounts in order to meet sales targets, Wells Fargo last month suffered a steep decline in new retail checking accounts and credit card applications.
Consumers opened 143,000 fewer Wells Fargo checking accounts in September than they did during the same period a year ago, the company said Friday. New checking accounts were down by 25% from a year earlier, and down by 30% from August 2016.
Wells also received 77,000 fewer consumer credit card applications last month than it did in September 2015, a 20% decline. The fall-off was 30% when compared with August 2016.
And the short-term damage from the scandal may be even worse than those numbers suggest. That is because the problems at Wells Fargo were not made public until Sept. 8, which suggests that the company did not feel any impact until the second week of the month.
The bad news for the banking giant could be a good sign for credit unions, which have long attempted to portray themselves as the polar opposite — service-wise — of big for-profit banks. Some CUs have
During a conference call with analysts Friday, newly appointed Chief Executive Tim Sloan was asked whether the company is considering lowering any of the fees associated with its checking accounts, in an effort to overcome the harm done recently.
Sloan responded that Wells Fargo is thinking about pricing, and could make changes. But he added, “I would not expect us to lead with price."
The company appears to have fared far better with its existing retail customers than with new ones. Overall, consumer and small- business banking deposits were up 9% in September from the same period a year earlier.
But Wells also reported that measures of customer loyalty and customer satisfaction dropped off in September.
Wells reported that it did not see any meaningful deterioration in its wholesale banking business late in the third quarter, and that the impact on its wealth management business was minimal.
