The Department of Justice ("DoJ") is taking a closer look at Wells Fargo & Company’s (WFC - Free Report) wholesale banking division, after it reported that the unit’s employees had altered or added client’s personal information such as birthdays and social security numbers without their knowledge. The news was first reported by The Walls Street Journal.
For this purpose, the DoJ has asked Wells Fargo to provide more information to see if this was a result of undue pressure on the employees by management to meet regulatory deadlines.
Wells Fargo reported that the incident took place in 2017 and early 2018, when the bank was making efforts to comply with a regulatory consent order related to anti-money-laundering controls, per the article.
“This particular situation involved a new process and a new required document called Certification of Beneficial Owners that our team members have to complete to help ensure we know our customers,” said Alan Elias, a spokesman for the Wall Street giant. “We’ve recognized that in certain circumstances additional training and new procedures were needed and have now been applied.”
Since the breakout of sales scandal in its retail banking division, Wells Fargo remained busy with settling past legal hassles while problems in new areas of operations came in focus. In its latest quarterly report, the bank mentioned that legal charges in 2018 could exceed its reserves by about $2 million.
However, the bank’s cost-control plan for the current year might help it deal with the pressure on costs. Also, its efforts to recover image among customers, and an improving economic backdrop might support growth in the near term.
Wells Fargo’s shares have declined 4.5% year to date against nearly 1% growth recorded by the industry.
Currently, Wells Fargo carries a Zacks Rank #3 (Hold).
Stocks to Consider
BOK Financial Corporation (BOKF - Free Report) earnings estimates have been revised 2.5% upward in the Last 60 days. Additionally, the stock has gained 31.7% in a year’s time. It currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Comerica Incorporated's (CMA - Free Report) current-year earnings estimates have been revised 5.1% upward over the last 60 days. Over the past year, the company’s share price has been up 51.2%. It currently carries a Zacks Rank of 1.
Northern Trust Corporation’s (NTRS - Free Report) Zacks Consensus Estimate for current-year earnings has been revised 3.4% upward over the last 60 days. Also, the company’s shares have risen nearly 20% in the past year. It carries a Zacks Rank of 2, at present.
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