Wells Fargo & Co. has lost “tens of millions of dollars” in revenue from municipal and state clients since a sales scandal in its consumer bank erupted 10 months ago, Chief Financial Officer John Shrewsberry said.
Bloomberg News reports that Shrewsberry said the decline isn’t material to Wells Fargo’s earnings, but added the company is working to regain the business. Ancel Martinez, a spokesman for the San Francisco-based lender, said the lost revenue is expected to be $20 million to $30 million for 2017.
“I don’t want to downplay it,” Shrewsberry said Friday in a telephone interview. “If we’ve irritated those customers, we want to compete and demonstrate to them how we’ve made things better and win their business back.”
California, Illinois and cities including New York, Chicago and Seattle halted some dealings with Wells Fargo, such as using the bank to sell municipal bonds, after it agreed Sept. 8 to pay $185 million to resolve claims that employees sought to meet sales targets by opening accounts without customers’ permission.
As part of Wells Fargo's Q2 earnings, the bank noted that business with government agencies picked up in the later half of the quarter, leading to $1.1 billion in new loan balances. While the bank doesn't break out revenue generated by its government and institutional business unit, at Investor Day in May, Wells Fargo noted that the group generated 4 percent of the wholesale division’s $28.5 billion in revenue in 2016.
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