(Adds analyst comment, details, share price)
NEW YORK, March 20 Wells Fargo & Co saw
a drop in the number of consumers opening checking and credit
card accounts in February, the bank said on Monday, marking a
sixth month of declines since a sales scandal rocked the bank
Consumers opened 3 percent fewer checking accounts from
January, and 43 percent, or 0.3 million, fewer compared with
February 2016, according to a company statement.
Requests for new credit cards saw a 4 percent monthly
decline and a 55-percent drop on a yearly basis, its highest
rate since illegal sales practices at its retail branches
surfaced in September 2016.
"It will take time for us to work through the changes we are
making in our business, but we remain focused on strengthening
our relationships with existing customers and building new ones
with potential customers," Mary Mack, Wells Fargo's head of
community banking, said in the statement.
Wells Fargo has been reporting on customer activity at its
branch banking unit every month since it reached a $185 million
settlement with regulators in September over creating as many as
2.1 million accounts in customers' names without their
The third-largest U.S. bank has since encountered more
government probes and lawsuits, and its board recently said an
internal review may uncover more problematic accounts.
Wells Fargo shares were down 1.4 percent in afternoon
trading at $57.80.
Analysts said they considered February's retail results a
mixed bag. While fewer customers opened new accounts, the
overall number of primary consumer checking customers rose by
1.9 percent to 23.5 million from February 2016, mainly due to
fewer customers requesting the closure of their account.
But the number of primary checking customers still saw the
slowest pace of growth since the sales scandal emerged and was
not able to offset the decline in new-account openings.
"A pick-up in marketing spend should benefit account
openings the next few months, but were that not to occur, then
it could force us to reconsider the long-term growth potential
in Wells' retail bank," Brian Kleinhanzl, an analyst with KBW
said in a research note.
Overall branch interactions fell 1 percent from January and
were down 11 percent on a yearly basis.
"After factoring in day count differences, February trends
were generally similar to January's and were within our
expectations," Mack added.
(Reporting by Tina Bellon; Editing by Bernadette Baum)