Top officials at Bank of America and Wells Fargo said that commercial loan demand is weak, even as U.S. consumers show strength. Their comments echo recent findings by the Federal Reserve.
For the third time in five months, the San Francisco bank made a downward revision Monday to its guidance on net interest income. An executive cited the impact of lower interest rates.
A federal judge has given preliminary approval to the proposed settlement of a lawsuit under which insurance companies have agreed to pay $240 million for losses the San Francisco bank incurred from the widespread opening of fake accounts.
The San Francisco bank is under pressure from investors to get out from under a Fed-imposed asset cap and to hire a new permanent CEO. But executives said Friday that thoroughness is more important than speed.
The settlement would mark a rare instance where the bank stands to benefit monetarily from a scandal that has severely damaged its reputation and cost it hundreds of millions in penalties.
The recent decision involved sales taxes, but Wells Fargo recorded a net expense of $481 million under the assumption that it will also lead to higher state income taxes. Other banks may have to follow suit.
