The multinational financial services provider, Wells Fargo & Company (LON: 0R2F) is going to pay special compensation to frontline staff (who answer incoming calls or help customers in person in the premises of the bank) amidst the novel coronavirus outbreak. The staff of the bank such as call-centres employees, area office workers and technology specialists, who are continuously coming to the office during the epidemic, will get an additional $200 per pay period commencing from 17th April 2020 for up to five payment checks. The bank stated that the full-time employees with the organisation and who earn less than $100,000 a year would $600 prior to tax, and the part-time workers will get $300 additionally.
As per media reports, other large banks in the U.S.A. have also joined in this mission and announced a payment of extra compensation to their employees. The Bank of America Corp. announced that it would provide an extra $200 per pay period to its frontline employees in call centres, branches and operation centres, with improved overtime compensation. On 20th March 2020, the largest U.S. bank by asset size, JPMorgan Chase & Co also declared that it would pay $1,000 bonus to those employees who are working in call centres and branches during the Covid-19 Outbreak.
On Monday, another American bank, Citigroup Inc came up and announced a payment of around $1,000 bonus to U.S. staff who earn less than or up to $60,000 in the base wages annually.
However, Wells Fargo & Company’s management decided not to pay out an optional profit-sharing 401(k) contribution for the year 2019, referring to the bank’s financial performance in the year 2019 and the unexpected environment. Lastly, it expressed gratitude to the employees who have been working for the bank and have been physically present in branches, contact centres and other offices during this outbreak.
Wells Fargo & Company declared support for communities and customers impacted by COVID-19
Wells Fargo & Company has already announced on 20th March 2020 some additional measures to help client, costumers, community and employees, who are encountering the effects of the novel coronavirus. The company said that it would raise its charitable donations to $175 million to provide shelter, food, housing stability, helping small businesses as well as to provide assistance to the public health organisations.
The chief executive of the company, Charlie Scharf, stated that COVID- 19 is creating disruptions in day to day lives of people throughout the globe. For this, the company has taken the steps necessary to support employees, customers and community during this stressful situation.
Wells Fargo Foundation’s donations will be immediately distributed through grant-making at the local level and also through relief efforts in partnership with national organisations who work in many vital areas throughout the United States Resources. It will be aimed at supporting most destitute population, including for housing, food and other emergency requirements. This consists of $1 million in funding to Feeding America to help their 200 member foodbanks as they work to provide food to the people in this time of emergency.
Overview of Wells Fargo & Company
Wells Fargo & Company (LON: 0R2F) is a financial service providing company with the assets of $1.9 trillion at the end of the fourth quarter in 2019. It is a diversified and community-based company with the objective of fulfilling the financial needs of its customers. It is headquartered in San Francisco in the USA and was incorporated in the year 1852. Wells Fargo delivers banking, investment and mortgage products and services with commercial and consumer finance via approximately 7,400 sites and over 13,000 ATMs, Mobile banking and internet banking. It has around 260,000 employees and serves one out of every three households in America. In Fortune's 2019 rankings of America's largest corporations, the bank secured the 29th rank.
0R2F – Financial Highlights
On 20th February 2020, the company published its annual financial report for the year ended 31st December 2019.
The net income decreased by 13 per cent to $19,549 million during the year 2019. Net income to average assets ratio declined to 1.02 per cent at the end of the year 2019 as compared to 1.19 per cent at the end of FY2018.
Return on average tangible common equity (ROTCE) was 12.20% at the end of FY2019, compared to 13.73% at the end of 2018. Net interest margin ratio declined to 2.73% for FY2019 compared to 2.91% in FY 2018. Total equity to assets ratio came in at 9.75% at the end of the year 2019 compared to 10.39 % at the end of FY2018.
The debt security of the company improved to US$ 497,125 million at the end of the FY2019 as compared to $484,689 million at the end of the FY2018. Loans increased to $962,265 million at the end of the FY2019 as compared to $953,110 million at the end of the FY2018. Equity securities increased to $68,241 million at the end of the FY2019 as compared to $55,148 million at the end of the FY2018.
The total revenue decreased by 2 per cent to $85,063 million during FY2019. Pre-tax pre-provision profit fell by 11 per cent to $26,885 million during FY2019. Average loans, Average assets and Average total deposits increased by 1 per cent each to $950,956 million, $1,193,444 million and $1,286,261 million respectively during the year 2019.
0R2F – Share price Performance
On 25th March 2020, at around 10:05 AM (GMT), by the time of writing this report, the stock of Wells Fargo & Company was trading at a price of USD 29.69 per share on the London Stock Exchange, an increase in the value of around 6.45 per cent or USD 1.80 per share, as opposed to the closing price of the stock on the previous trading day, which has been reported to be at USD 27.89 per share.
The share price of Wells Fargo & Company recorded at USD 54.86 as on 29th November 2019 was its 1-year peak price, whereas the share price recorded at USD 25.56 as on 23rd March 2020 was the 1-year low share price. The current share price was lower by 45.88 per cent from the 1-year high price. The current share price was higher by 16.15 per cent from the 1-year low price.
The beta of the company’s stock has been reported at a value of 1.29, which shows that movement of the share price is of higher volatility against the movement in the comparative benchmark index. The annual dividend of the company was reported at USD 2.04 per share, and the annual dividend yield was reported to be 7.31 per cent at the time of writing.
At the time of writing, the company’s market capitalisation was reported at USD 118.27 billion with respect to the stock’s current market price. The free float and outstanding shares of Wells Fargo & Company stood at 4.08 billion and 4.09 billion, respectively.