Wells Fargo Lost ‘Tens of Millions’ in Muni and State Deals After Scandal
Wells Fargo & Co. lost “tens of millions of dollars” in United City revenues and clients since the eruption of a consumer sales scandal 10 months ago, Chief Financial Officer John Shrewsberry said.
Shrewsberry said the decrease is not important for Wells Fargo’s profits, but added that the company is working to restart the activity.
Ancel Martinez, a spokeswoman for the San Francisco-based lender, said the loss of revenue is due to $ 20 million to $ 30 million by 2017.
“I do not want to downplay it,” Shrewsberry said Friday in a telephone interview. “If we have these angry customers, we want to compete and demonstrate how we have improved things and won their business.”
California, Illinois, and cities including New York, Chicago and Seattle have stopped some transactions with Wells Fargo, such as using the bank to sell municipal bonds, after accepting September 8 to pay $ 185 million to settle claims in Under which employees who try to achieve sales goals open accounts without the authorization of customers.
The Justice Department and the Securities and Exchange Commission are studying.
Former Public Finance Director Wells Fargo, Peter Hill, left in April to take up a similar position at UBS Group AG.
Nancy Feldman, who previously led the public transportation finances, assumed the leadership position following the departure of Interitaire Hill.
The bank does not report the profits generated by its government unit and institutional business.
However, during a presentation on Wells Fargo Investor Day in May, the company said the group generated 4% – or about $ 1.14 trillion – turnover of $ 28.5 trillion from the wholesale division in 2016 About half the total of the unit comes from government clients, the presentations showed.
Most government clients, including “Someone said:” We are angry with Wells Fargo “” still do business with the bank, “said Shrewsberry.
“The economy has not changed much,” he said. “It’s not like the whole relationship of movement.”
The wholesale division of Wells Fargo fell to 4.6 percent of sales in the second quarter, according to a statement on Friday.
The company said business with government agencies resumed during the second half of the quarter, resulting in loan balances of $ 1.1 billion.
The lender has recently lent 500 million dollars in California despite state-imposed sanctions for the bank, Tim Sloan, CEO, analysts said Friday during a conference call.
In April, Nevada has agreed to extend its banking agreement until 2021, Wells Fargo said in a statement.