Wells Fargo on Friday reported quarterly revenue and earnings that beat analysts’ expectations, but details from its results seem to show the bank’s recent fake-accounts scandal is starting to hit home.
Growth in the overall number of retail accounts on its books slowed considerably in September, a presentation accompanying earnings shows.
That slowdown came after a $185 million settlement between Wells Fargo and regulators was announced and former CEO John Stumpf was dragged in front of the Congress to explain.
According to a chart in the presentation, credit card applications fell 30% between August and September, and were down 25% from September 2015. And new checking account openings also fell 30% from August and 25% from September 2015.
Perhaps most damning is that consumer surveys, which showed that loyalty to the bank has been steadily increasing over the past two years, dropped off significantly. In-store surveys of customer loyalty showed a roughly 5 percentage point decrease from the month before, to 57.7% in September from 62.6% in August.
Even the number of interactions between branch bankers and customers declined sharply, down 14% from August and down 10% from the year before.
While the headline number for Wells Fargo seemed to hold up, the slowing trend for the retail business in the month since the scandal broke may be a worrying sign of things to come.
