SAN FRANCISCO – New account openings at Wells Fargo plunged in October, the first full month after the bank became mired in a scandal linked to bogus accounts opened without the permission of its customers, the financial services giant reported Thursday.
"As expected, we continued to see declines in new account openings," said Timothy Sloan, Wells Fargo's chief executive.
Wells Fargo reported that consumer checking account openings fell 27 percent in October compared with September activity. Account openings also were down 44 percent compared to October 2015, the same month the year before.
"We recognize we have work to do," Mary Mack, head of community banking, said Thursday.
Consumer-initiated account closures rose slightly in October, up 3 percent both compared to the month before and the year before.
Applications for new credit cards plummeted in October, dropping 35 percent compared to September and 50 percent compared to October 2015.
Customers did increase their usage of debit cards for point-of-sale transactions, the bank reported. These kinds of transactions rose 7 percent in October compared to the year before. The number of active debit cards rose 3 percent over the same one-year time frame, the bank reported.
The value of bank deposits rose in October compared to the same month in 2015. Consumer and small business bank deposits totaled $745 million, up 7 percent from October 2015 but down 1 percent from September.
San Francisco-based Wells Fargo on Sept. 8 disclosed its employees had opened, over a period of several years, up to 2 million bogus bank and credit accounts without the knowledge or permission of customers. Wells Fargo was fined $185 million.
Separately, the California attorney general's office revealed on Oct. 19 that it had begun a criminal investigation into Wells Fargo's sales practices.
The bank also reported that customers are interacting less frequently with tellers and bankers in the branches. "We are focused on strengthening our relationships with existing customers and building new ones with potential customers," Mack said.