Wells Fargo (WFC) cut dozens of fixed-income analysts and is curbing distribution of fixed-income research to save money, a media report says.
The San Francisco banking titan has been hit by numerous scandals and government penalties over the past few years. The scandals included opening accounts unneeded and unwanted by customers.
As for the analyst cuts, they include people doing research on high-yield and investment-grade bonds and structured credit, knowledgeable sources told Bloomberg.
“We regularly review and evaluate the needs of our clients to align our resources accordingly,” Wells Fargo spokeswoman Hannah Sloane said in a statement.
“We continue to offer our clients fixed-income expertise and best-in-class product education, portfolio analysis, market intelligence, market commentary and investment analysis through our fixed-income market and portfolio-strategy group.”
Charles Scharf, who took the chief executive's post a year ago, has begun job cuts that could total 20% to 25% of its workforce, or around 50,000 to 66,000 jobs, Pension & Investments reported.
Morningstar analyst Eric Compton has a cautiously optimistic view of Wells Fargo and puts fair value for the stock at $45.
It recently traded at $22.15, down 2.4%. The stock has dropped 59% year to date.
“We’re hoping that fourth-quarter results will show a bottom for net interest income, and that a gradual recovery in fees will continue" for Wells Fargo, he wrote after its earnings report last week.
“Regarding expenses, … we’re hoping a more normalized run rate of $54 billion-$55 billion may eventually materialize, but there is admittedly a lot of uncertainty here, and we wouldn’t be surprised to see more restructuring charges in the meantime.”