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Financial Planning > Tax Planning > Tax Loss Harvesting

Wells Fargo Reports Loss, Vows to Cut $10B

By Janet Levaux

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Wells Fargo’s reported its first quarterly loss since since 2008 on Tuesday, with its loan-loss provisions rising sharply due to the fallout of the coronavirus pandemic.

The bank lost $2.4 billion in the second quarter, or $0.66 per share, vs. profits of $6.2 billion, or $1.30 per share, a year ago and $653 million, or $0.01 per share, in the first quarter.

Wells Fargo set aside $9.57 billion in Q2 for potential loan losses, more the doubling the $3.83 billion it put aside in the prior quarter.

Its total revenues were $17.8 billion in Q2,  up slightly from $17.7 billion in Q1, but down from $21.6 billion in the year-ago quarter.

Meanwhile, JPMorgan said it had set aside $10.47 billion for credit losses in Q2, higher than its $8.6 billion in loan-loss provisions from early 2009. It reported quarterly profits of $4.69 billion on adjusted revenues of $33.82 billion.

Wealth Unit

Wells Fargo’s financial advisor headcount dropped to 13,298 from 13,450 as of March 31 and from 13,723 a year ago. (The bank had 15,086 registered reps on Sept. 30, 2016, when it began making headlines for its fake-accounts scandal.)

The wealth unit’s net income plunged 70% to $180 million in Q2.

Wells Fargo CEO Charlie Scharf says the bank will begin trimming costs in the second half of 2020 and plans to cut at least $10 billion of expenses, including those tied to management and non-core activities.

“This cannot continue,” Scharf said on a conference call with analysts Tuesday after it announced its latest earnings, according to a Bloomberg report. “There’s no reason why as a management team we don’t have the ability to be as efficient as the rest.”

Wells Fargo has some 266,000 workers and aims to cut thousands of job starting this year.

Janet Levaux

@Think_JanetL

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