Hampered by scandals, Wells Fargo's profits stagnate

Hampered by scandals, Wells Fargo's profits stagnate
This Thursday, Nov. 29, 2018, photo shows a Wells Fargo bank location in Philadelphia. Wells Fargo & Co. reports financial results Tuesday, Jan. 15, 2019. (AP Photo/Matt Rourke, File)

NEW YORK (AP) — Wells Fargo, the consumer banking giant, said its fourth-quarter profits fell slightly on Tuesday as the bank remains restrained by federal regulators, who put a tight leash on it after years of scandals and missteps.

The San Francisco-based bank said it earned a profit of .06 billion in the last three months of a year, or .21 per share. That is down from .15 billion, or .16 per share, in the same period a year earlier. The results did beat analysts’ expectations, who were looking for Wells to earn .19 a share.

Wells Fargo has been in a multi-year attempt to turn itself around after years of scandals in nearly every part of its business. Federal regulators have fined the bank billions of dollars for violating consumer protection laws, and the Federal Reserve has restrained Wells Fargo from growing any larger than its current size until the bank can prove it’s a better-run company.

The restraints have put a hamper on the ability of Wells Fargo to grow profits in the past year. The bank saw its total loans fall slightly from a year ago, and deposits were also down slightly. That’s notable because in a growing economy, a bank the size of Wells Fargo would typically be growing both deposits and assets, just like its competition.

The biggest U.S. mortgage lender posted revenue of .26 billion in the period. Its revenue net of interest expense was .98 billion, which also missed forecasts. Analysts were looking for Wells to earn .74 billion in revenue.

Wells Fargo shares were down 1 percent in pre-market trading. They are up 5 percent so far this year.