Charles Scharf, who has spent about 18 months bringing back Wells Fargo to normalcy after its battle with issues related to credit cards, has undoubtedly made his mark. Consistent with other top U.S. banks, quarterly earnings look great. First Quarter 2021 saw the storied firm deliver $18 billion in revenue and producing $4.6 billion in net income, driven by the recoup of funds tucked away for anticipated credit losses.
Credit card total revenue fell short of December 31 reporting, however. 1Q21 reported $1.346, versus the prior quarter of $1.372. Compared to 1Q20, results are also softer when Wells.
The San Francisco Business Journal reported on Wells’ quarterly results on CEO’s credit card vision, and it is exciting to hear Mr. Scharf comment:
- Scharf didn’t mince words when asked bout Wells Fargo’s competitive position in credit cards. “When you look at what we do as a card company, the fact is our card propositions are not competitive with what is viable today in the marketplace,”
- Scharf said. “When we look at the things we do on fraud, when we look at customer service, every step of the way, we think we have opportunities to make material improvements. “We’re underpenetrated in credit cards, given our customer footprint,” he said. “We’re working on developing a significantly improved value proposition that we can introduce to the market.
The CEO knows more about cards than many other business heads after his stint as CEO at Visa and his prior position as CEO of JPMC retail services after the Bank One merger. Payments Journal pointed out Charles Scharf’s business acumen in credit card shortly after entering his new role.
Wells will have plenty to do to regain a leadership role in payments, but it has the girth and desire to make a powerful play. We bet that Wells Fargo has the depth to reestablish its position in U.S. credit cards in the very near term.
Overview provided by Brian Riley, Director, Credit Advisory Service at Mercator Advisory Group
