Picture: BLOOMBERG/RON ANTONELLIWells Fargo slumped on Tuesday after reporting its first quarterly loss since 2008 as loan-loss provisions soared with the bank expecting a more severe downturn from the coronavirus pandemic.
The San Francisco-based lender also cut its dividend to 10c a share from 51c. Wells Fargo said in June it would lower the payout after the Federal Reserve implemented a new rule tying dividends to earnings. The bank’s $2.4bn loss in the second quarter was a stark turnaround from the near-record $6.2bn in profit it posted a year ago.
The bank’s shares fell 3.6% to $24.50 in early New York trading. They had declined 53% in 2020 by Monday. One analyst, Erika Najarian at Bank of America, warned on Monday that Wells Fargo could eventually cut its dividend to zero.
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