Wells Fargo’s many scandals of late are taking a bite out of the bank’s bottom line. The institution’s profits sank 12% in the second quarter, according to its latest earnings report, which was released this week.
The bank reported that operating expenses were at $619 million and revenue was down about a half billion dollars.
In addition to disappointing investors, the bank reported far fewer deposits and loan originations, a sure sign that’s customers are being turned off.
Wells Fargo earnings report shows scandals having negative effect
Wells Fargo CEO Tim Sloan painted the earnings report in a positive light, saying in a written statement, “Our progress included making further improvements to our compliance and operational risk management programs; hiring a new Chief Risk Officer” and other things.
Wells Fargo’s troubles stem from several missteps. Earlier this year, the Federal Reserve cracked down on the bank for what it called “widespread abuses.”
Money expert Clark Howard says if you want the best bang for your buck, then you should leave the huge banks and opt for credit unions. Although the “big banks” hold about 40% of all U.S. commercial bank assets, they come with all types of potential problems for customers, as Wells Fargo’s case illustrates.
Here are several banking alternatives to consider.