Gillian Tan, Columnist

Wells Fargo Can't Quite Seem to Fix Its Wagon

Dogged by rising expenses, it needs to show earnings will climb of their own accord and not just from tax changes and buybacks.

January 12, 2018 at 3:14 PM UTC

By Gillian Tan

Gillian Tan is a senior reporter covering finance and alternative asset classes including real estate, infrastructure, private equity, private credit, venture capital and sports business. She previously wrote an opinion column for Bloomberg and was a reporter at the Wall Street Journal. She is a qualified chartered accountant.

1515602747_315461118_1-6 (1) — Photographer: Cooper Neill/Bloomberg

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Waiting for another sign that Wells Fargo & Co. has turned a corner? Its fourth-quarter earnings, released Friday, provided differing levels of validation for investors who had sent the stock flying to a record earlier this week.

For the first time since the GOP tax bill was passed last month, Wells Fargo detailed its impact. The bank essentially confirmed expectations that the new legislation will deliver an earnings boost that should top any other major U.S. bank, in part because of its extremely domestic focus as compared to its more global rivals. Plus, unlike Citigroup Inc. and most other major banks -- which have deferred-tax assets -- Wells Fargo had a deferred-tax liability, which gave it a one-time gain instead of a writeoff.