SAN FRANCISCO: Wells Fargo posted a small rise in quarterly profit yesterday that beat Wall Street estimates, as stabilising credit costs helped offset the hit from low-interest rates meant to prop up the ailing economy during the Covid-19 pandemic.
The bank, which has been plagued by hefty costs tied to litigation over the past several years, recorded a drop in overall expenses in the latest fourth quarter from last year. But costs remain elevated because of the sales practices scandal that has haunted it since 2016.
Wells Fargo paid $321 million in customer remediation costs in the quarter, despite bank executives repeatedly signalling that the worst of the fallout, which has cost it billions, is in the past.
The company also booked $781m in restructuring charges as chief executive Charlie Scharf takes tough measures to shift fortunes at the bank that he joined in 2019.
Scharf has targeted $10 billion in savings annually over the long term. The bank has also been offloading assets, including a possible sale of its asset management business to a private equity consortium.