In its first full quarter after its fake account scandal, in which 5,300 employees were fired for creating up to 2 million deposit and credit card accounts for people without their permission, Wells Fargo (WFC) posted some grim numbers that finally show how consumers have responded.
The bank’s financials missed analyst expectations, due to hedging issues, recording $5.27 billion in profit, or 96 cents a share, versus an expected $5.58 billion, or $1 per share. (Revenue similarly missed, coming in at $21.9 billion against an estimate of $22.45 billion). However, the story bigger than the tepid earnings report were the numbers that showed just how wary consumers still are in the aftermath of the scandal.
Steep drop in new credit card openings
One troubling line from the earnings report out Friday showed December credit card openings fell by a whopping 43% from a year earlier—and a 7% drop from the previous month. This echoes the similarly bad third-quarter performance.
Despite the bad PR and third quarter consumer credit card signup woes, investors have enjoyed a 23% climb in the stock since the September fallout, benefiting from the same post-election run-up most of the financial sector has seen. Wells Fargo shares were up slightly in early trading Friday.
Checking account openings vs. closures
On the deposit account side, checking account openings were similarly down 40% from December 2015. However, they did rise a modest 2% from November. At the same time, December checking account closures fell by 4%—a bit of good news for the bank’s customer retention efforts.
Unfortunately for the bank, lower account openings and closings were canceled out as some consumers simply stopped using their checking accounts—canceling without canceling. From November to December, active checking customers fell from 23.6 million to 23.5 million, which means 100,000 people stopped using their Wells Fargo checking accounts. (Despite the month-to-month attrition, year-over-year activity was up 3%). But overall balances grew slightly, to $753 billion, better than pre-scandal numbers.
Ethan Wolff-Mann is a writer at Yahoo Finance focusing on consumer issues, tech, and personal finance. Follow him on Twitter @ewolffmann.