The financial institution stated it lowered the cash it put aside to cowl mortgage losses by $1.7 billion. It had raised these mortgage loss reserves early in 2020, when the way forward for the economic system and the size of the recession
introduced on by Covid-19 pandemic was unsure.
“The actions we’re taking to improve operating effectiveness and financial returns are coming through in our results, in addition to the benefits we’re experiencing from the economic recovery,” stated CEO Charlie Scharf.
In the second quarter of 2020, Wells Fargo raised the reserves it had put aside for mortgage losses by $8.4 billion, which triggered the financial institution to submit its first quarterly loss since the Great Recession
at the moment.
Scharf was brought in as CEO
at Wells Fargo two years in the past to take care of the scandal
of the financial institution creating false buyer accounts and improperly charging them charges. He is the fourth CEO for the reason that fall of 2016.
He’s had some success. A 2018 consent order with the Consumer Financial Protection Bureau relating to the financial institution’s retail gross sales practices was not too long ago allowed to run out, an occasion that Scharf described as “an important milestone in our progress to correct our past practices.” But that does not imply its regulatory problems are behind it.
The Office of the Comptroller of the Currency, the Treasury Department’s banking regulator, slapped it with a $250 million fine
in September for failing to maneuver quick sufficient to compensate clients who had been victims of the financial institution’s “unsafe or unsound” practices.
“The recent OCC enforcement actions are a reminder that the significant deficiencies that existed when I arrived must remain our top priority,” stated Scharf. “I believe we are making significant progress, and I remain confident in our ability to continue to close the remaining gaps over the next several years, though we may continue to have setbacks along the way.”
Shares of Wells Fargo (WFC)
had been barely greater in premarket buying and selling on the outcomes.