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Wells Fargo Cuts Mortgage Jobs, Raises Credit Card Rewards

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Wells Fargo & Company (WFC - Free Report) has laid off another 130 employees who worked in Twin Cities mortgage as a response to declines in origination volume, foreclosures and rising mortgage rates. The news was reported by The Minneapolis/St. Paul Business Journal.

Wells Fargo is struggling with the rising rate environment and declining supplies of homes for sale. Despite being one of the leading home lenders, it reported a 43% decline in revenues from home-loan originations and sales during the first-quarter 2018.

Last week, it slashed about 100 jobs in its mortgage operations branch in Charlotte, NC due to slowdown in mortgage business, and another 63 in Maryland.

The company has provided a 60-day notice to employees and also notified state employment offices in the various locations. The affected people are eligible for pay and benefits till Aug 19. Also, Wells Fargo will make full effort to help them find another job within the company.

On the other hand, Wells Fargo has introduced a new credit card rewards program to compete with other major banks that provide benefit-heavy cards. The company said that it will increase rewards for one of its premium cards to include offerings such as three points reward on every dollar spent on dining, traveling and streaming services like Netflix for no annual fee.

Wells Fargo’s efforts to move ahead of its past misconducts and legal involvements are encouraging. Further, its full-year cost savings plan of $2 billion will help it deal with the pressure on financials. Also, the bank’s efforts to recover its image, along with an improving economic backdrop might support its growth in the near term.

The stock has gained 4.3% in the past year underperforming the industry’s growth of 13%.

Wells Fargo currently carries a Zacks Rank #3 (Hold).

Stocks to Consider

Cullen/Frost Bankers (CFR - Free Report) earnings estimates have been revised upward by 4% in the last 60 days. Additionally, the stock has gained nearly 25.2% in a year’s time. It currently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Comerica Incorporated's (CMA - Free Report) current-year earnings estimates have been revised 1.2% upward over the last 60 days. Over the past year, the company’s share price has been up 34.2%. It currently carries a Zacks Rank #2 (Buy).

M&T Bank Corporation’s (MTB - Free Report) current-year earnings estimates have remained stable over the last 30 days. Additionally, the stock has jumped 10.2% in the past 12 months. It also currently carries a Zacks Rank #2.

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