Wells Fargo says it expects to chop dividend within the third quarter

Wells Fargo says it expects to chop dividend within the third quarter

Folks stroll by a Wells Fargo financial institution department on October 13, 2017 in New York Metropolis.Spencer Platt | Getty PhotographsWells Fa

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Folks stroll by a Wells Fargo financial institution department on October 13, 2017 in New York Metropolis.

Spencer Platt | Getty Photographs

Wells Fargo warned on Monday that it’ll seemingly reduce its dividend after the Federal Reserve introduced it might cap dividends for banks based mostly on earnings. 

Wall Road analysts pointed to Wells Fargo as a likely candidate to chop its dividend following the announcement by the central financial institution final week, which got here after the stress exams the Fed offers to main monetary establishments.

The corporate’s earlier quarterly frequent inventory dividend was 51 cents per share. The financial institution stated in a press launch that it expects to announce the new dividend when it reviews quarterly earnings on July 14. Shares of the financial institution fell 1.7% in prolonged buying and selling. 

Charlie Scharf, the financial institution’s chief government officer, stated in a press launch that Wells Fargo expects to take one other enhance within the provision for mortgage losses that’s “considerably increased” than final quarter’s enhance. The expansion of that provision will put downward strain on the financial institution’s earnings. 

“These are definitely extraordinarily difficult occasions for a lot of and we stay dedicated to supporting our clients and communities, and we are going to proceed to take acceptable measures to keep up sturdy capital and liquidity ranges and to enhance the earnings capability of the corporate,” Scharf stated within the launch.

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