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12/16/2016, 5:20 PM (Source: TeleTrader)
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Wells Fargo hit by drop in new accounts after scandal

Following lawsuits which cost Wells Fargo and Co. $190 million in September in a settlement with the United States government and customers, new checking account openings tumbled 41% last month on a yearly basis. The number is 9% lower than in October, when previous chief executive John Stumpf resigned, the bank said on Friday. He has apologized in the Senate after revealing its unrealistic targets for employees led to the opening of two million fee-generating accounts since 2011 for customers who never requested them.

Wells Fargo has said it stopped the fraudulent practice and fired over 5,300 people. However, Californian regulators said earlier this week they are investigating allegations by whistleblowers from Prudential that the bank signed up customers for insurance without their knowledge. Last month Pennsylvania suspended the bank from any Treasury investment or trading activities for one year. Customer interactions with branches declined by an annual 14% in November and applications for credit cards slumped 45%.

The financial services company's shares added 0.44% to trade for $55.44 at 4:53 p.m. CET, outpacing the benchmark S&P 500 index, which ticked 0.14% up. Wells Fargo is just 0.9% lower than one year ago, while the broad equity gauge climbed 9.3%.

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