Bulletin: Wells Fargo&Co.'s Earnings Dip And Capital Decline Are Credit Negatives, Offset By Positive Business Momentum

NEW YORK (S&P Global Ratings) Jan. 14, 2020--S&P Global Ratings said today that Wells Fargo&Co. (Wells; A-/Negative/A-2) reported subpar fourth-quarter earnings of $2.9 billion; additionally, capital ratios continued to decline, with Wells' common equity tier 1 ratio (CET1) falling 50 basis points sequentially to 11.1%. Although these results are well below our expectations for the quarter, Wells' business lines remain well positioned and diversified, providing good earnings capacity over the longer term. Still, substantial uncertainties persist about the company's progress in resolving highly complex operational and regulatory issues, including the timeframe of the regulators' lifting of the asset cap.  Earnings included $1.9 billion in operating losses, of which $1.5 billion was litigation accruals. This follows the $1.6 billion

...NEW YORK (S&P Global Ratings) Jan. 14, 2020--S&P Global Ratings said today that Wells Fargo & Co. (Wells; A-/Negative/A-2) reported subpar fourth-quarter earnings of $2.9 billion; additionally, capital ratios continued to decline, with Wells' common equity tier 1 ratio (CET1) falling 50 basis points sequentially to 11.1%. Although these results are well below our expectations for the quarter, Wells' business lines remain well positioned and diversified, providing good earnings capacity over the longer term. Still, substantial uncertainties persist about the company's progress in resolving highly complex operational and regulatory issues, including the timeframe of the regulators' lifting of the asset cap. Earnings included $1.9 billion in operating losses, of which $1.5 billion was litigation accruals. This follows the $1.6 billion litigation accrual that the company took in the third quarter of 2019. The company has said the litigation accruals pertain to a variety of matters, including...

Bulletin