Fallout from its bogus account scandal is still weighing on Wells Fargo, who have reported flat first quarter earnings.
Editor’s Remarks: A strong start to the year from rivals JPMorgan and Citi comes in stark contrast to Wells Fargo’s first quarter. The sales scandal, which erupted last year over large-scale sham account creation at some divisions, has continued disrupting Wells’ business. Add this to bulging fees from lawyers and other fixers brought in for damage control, and 1% drops in both net income and revenues from the same time last year come as little surprise. Even if it finds a way to shrug off the fallout, Wells has unfavourable market trends to contend with, too: as a more retail-oriented bank, it failed to reap the rewards from growth in US investment banking which pushed up JPMorgan and Citi, and there are no signs yet of a similar resurgence in consumer banking.
What to watch: Wells Fargo, Berkshire Hathaway, JPMorgan, Citigroup, Tim Sloan