Wells Fargo & Co. (NYSE: WFC) fourth quarter financial results fell lower due litigation charges the company faced under multiple scandals throughout the fiscal year, especially within the fourth quarter. Shares opened weaker down 1.35 percent on Friday.
For the fourth quarter, Wells Fargo reported revenue of $22.1 billion, falling short of analysts’ estimates of $22.38 billion. The bank reported an EPS of $1.16, beating analysts’ estimates of $1.07.
The fourth quarter also includes a $3.25 billion pre-tax expense or $0.59 per share due to litigation charges for the various scandals that the bank was involved in. The scandals ranged from mortgage-related regulatory investigations, sales practices, and other consumer related matters, says Wells Fargo.
In the year, the bank returned $14.5 billion to shareholders, up 16 percent year over year. CFO John Shrewsberry says returning to shareholders remains the bank’s priority.
The bank remains committed to its target of $2 billion expense reduction by the end of 2018, and then an additional $2 billion by the end of 2019.
“In 2017 we continued executing on our plan to build a better bank for the future, and I'm proud of the hard work and dedication of our team members to put our customers first as we transform Wells Fargo.” said Chief Executive Officer Tim Sloan.
“The progress we made over the past year was evident in the fourth quarter in higher deposits, loan growth particularly in commercial loans, increased debit and credit card transactions, and record client assets under management in Wealth and Investment Management.” added Sloan.
The bank has gone through a lot of negative consumer incidents, which led to higher expenses and less profitability. The bank tried throughout the year to reverse the relations with consumers, but was under hot water constantly.
“While we faced challenges in 2017, we are a much better company today than we wer