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.
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.