Wells Fargo’s embattled retail banking unit continues to suffer from its cross-selling scandal that exploded in the fall, especially in its credit card business.

The San Francisco company said Friday that its number of new checking accounts plunged 31% in January from a year earlier to 300,000. Customer-initiated checking-account closures rose 4% to about 200,000.

The lingering effects of the scandal also continued to weigh on the company’s credit card business, even though the flood of negative headlines about the company has begun to subside. Applications fell 47% to about 200,000.

During a conference call to discuss the results, Mary Mack, the head of retail banking at Wells, tried to put a positive spin on another tough month.

“Customers still opened more checking accounts than they closed,” Mack said, though she acknowledged that the differential was below historical levels.

The report came just over five months after Wells Fargo agreed to pay about $190 million to settle charges that employees opened roughly 2 million accounts in customers’ names without their permission.

The settlement quickly became a full-blown reputational crisis. Within a matter of weeks, John Stumpf resigned as CEO, replaced by longtime deputy Tim Sloan. Former retail head Carrie Tolstedt – whom Mack succeeded in July – left the company in late September.

Wells clawed back $41 million in compensation from Stumpf, as well as $19 million from Tolstedt, as the fallout from the scandal intensified.

The company has provided monthly updates on retail banking sales over the past few months to inform investors.

So far, those figures have shown that moving past the cross-selling fiasco has been – and will continue to be – a long slog.

“I’m pleased with the progress we’ve made to make things better for our customers and team members, but we still have more work ahead of us,” Mack said.

In January interactions with customers inside branches slid 14% from a year earlier, according to the latest report. Customer loyalty scores, which are based on surveys in the company’s branches, also declined.

Still, if there’s a glimmer of good news for Wells, it’s that new checking accounts have increased steadily since taking a nosedive in the fall.

New accounts rose 18% in January from December. By comparison, checking account openings plunged 27% in October.

Average consumer and small-business banking deposits were $754 billion in January, unchanged from December but up 7% from a year earlier.

During the call, Wells executives noted that credit cards applications have flatlined over the past few months, after plunging following the scandal. That trend shows less resilience than the sequential checking numbers.

One factor behind the credit card sales could be the company’s new performance metrics for branch employees, which emphasize customer feedback and other factors over individual sales, Mack said.

To boost credit card applications, the company is focusing on new marketing initiatives, including targeting existing customers through digital channels and direct mail to supplement branch activity.

The company also plans to put a greater emphasis on credit card sales to noncustomers. Less than 10% of credit card solicitations are currently targeted at noncustomers, Chief Financial Officer John Shrewsberry said.

“It’s relatively small today, but it’s designed to mature over time,” Shrewsberry said. “That was true before the cross-selling issues revealed themselves.”

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Kristin Broughton

Kristin Broughton

Kristin Broughton is a reporter for American Banker, where she writes about the business of national and regional banking.