Michael P. Regan, Columnist

Wells Fargo: The Customers Strike Back

Early indications show that the bank has a lot of mending to do.

October 14, 2016 at 5:03 PM UTC

Michael P. Regan is the global team leader for cryptocurrencies at Bloomberg as well as a former senior markets editor and former Americas team leader for Bloomberg's Markets Live blog. He has covered Wall Street for Bloomberg News as a columnist and editor since 2007. He previously worked for the Associated Press.

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How bad has the fallout from the fake-account scandal been for Wells Fargo's business so far?

Well, there wasn't exactly a run on the bank. Average deposits in the retail part of the bank for the third quarter actually inched up 0.6 percent from the second quarter to $708 billion. Average deposits for the entire bank were $1.3 trillion, up 2 percent from the previous quarter.

The fourth-quarter results will give a better read on the potential damage. News of the scandal broke on Sept. 8, and the backlash built slowly during the month and didn't quite reach a boiling point until the quarter was almost over. John Stumpf, the chief executive officer and chairman who retired ingloriously on Wednesday, did not face his well-publicized browbeating from the Senate until Sept. 20. The tongue-lashing from the House and the shunning of the bank by California and Illinois didn't happen until even later.

Still, some alarming signs of damage emerged in the third-quarter report. The bank provided a look at trends to isolate September, and it showed a noticeable impact from the scandal: Customer visits with branch bankers were down significantly, as were checking-account openings and credit-card applications: