Scandal hurts new business.
Fewer Americans want to ride the Wells Fargo wagon. That could be because some of those rides provided a one way trip to phony accountville.
On Friday, Wells Fargo wfc reported, along with its earnings, that applications for new checking accounts plunged 25% in September versus a year ago. Credit card application were down as well, by 20% from a year ago.
Wells Fargo saw a drop of 144,000 checking account applications from a year ago. Credit card applications dropped by 77,000 versus a year ago.
Despite the drop in new applications, the bank said the number was relatively small compared to the bank’s over 33 million total consumer checking accounts. What’s more the bank said that while the phony account scandal may have hurt the bank with new customers, it doesn’t seem to be turning away its current customers. The bank said its credit card and checking account activity of its existing customers was up in September, and the third quarter in general.
Wells Fargo’s CEO Tim Sloan, who got the top job at the bank earlier this week, said he understood there was a lot to be corrected. That seemed to be an about face for Sloan, who just months ago said he didn’t see anything fundamentally wrong with the bank’s sales practices or culture.
“This will be a headwind in community banking,” Sloan told analysts on an earnings conference call on Friday. “It will get worse before it gets better.”