NEW YORK (Reuters) - Wells Fargo & Co saw a drop in the number of consumers opening checking and credit card accounts in February, the bank said on Monday, marking a sixth month of declines since a sales scandal rocked the bank last year.
Consumers opened 3 percent fewer checking accounts from January, and 43 percent, or 0.3 million, fewer compared with February 2016, according to a company statement.
Requests for new credit cards saw a 4 percent monthly decline and a 55-percent drop on a yearly basis, its highest rate since illegal sales practices at its retail branches surfaced in September 2016.
“It will take time for us to work through the changes we are making in our business, but we remain focused on strengthening our relationships with existing customers and building new ones with potential customers,” Mary Mack, Wells Fargo’s head of community banking, said in the statement.
Wells Fargo has been reporting on customer activity at its branch banking unit every month since it reached a $185 million settlement with regulators in September over creating as many as 2.1 million accounts in customers’ names without their permission.
The third-largest U.S. bank has since encountered more government probes and lawsuits, and its board recently said an internal review may uncover more problematic accounts.
Wells Fargo shares were down 1.4 percent in afternoon trading at $57.80.
Analysts said they considered February’s retail results a mixed bag. While fewer customers opened new accounts, the overall number of primary consumer checking customers rose by 1.9 percent to 23.5 million from February 2016, mainly due to fewer customers requesting the closure of their account.
But the number of primary checking customers still saw the slowest pace of growth since the sales scandal emerged and was not able to offset the decline in new-account openings.
“A pick-up in marketing spend should benefit account openings the next few months, but were that not to occur, then it could force us to reconsider the long-term growth potential in Wells’ retail bank,” Brian Kleinhanzl, an analyst with KBW said in a research note.
Overall branch interactions fell 1 percent from January and were down 11 percent on a yearly basis.
“After factoring in day count differences, February trends were generally similar to January’s and were within our expectations,” Mack added.