Wells Fargo & Co is joining major Wall Street banks in rewarding junior bankers for fielding a surge in business amid the coronavirus pandemic.
The San Francisco-based bank will pay special bonuses of $10,000 to analysts and $20,000 to associates, incrementally over six months, according to person with knowledge of the plan.
“The past year has placed great pressure on our talent in certain client facing/revenue-generating roles in the corporate and investment banking division due to unprecedented deal flow and client activity,” the company said in a statement. “As such, we’ve decided to pay our analysts and associates a financial allowance.”
Shares jumped the most in two months
The shares of Wells Fargo & Co. jumped the most in almost two months after profit soared sevenfold, giving scandal-weary investors something to cheer as Chief Executive Officer Charlie Scharf’s turnaround effort shows signs of progress.
Scharf, who took over in late 2019, has focused on streamlining operations and pledged to eventually shave $10 billion off annual expenses. The firm announced sales of its asset manager and corporate-trust unit in the first quarter, and said that its rail-leasing unit is on the chopping block too. Wells Fargo has said it has more than 250 expense initiatives in the works that will take three to four years.
First-quarter net income at the San Francisco-based bank rises to $4.74 billion, boosted by a larger-than-expected release of loan-loss reserves, according to a statement. Non-interest expenses were $14 billion, up from a year earlier and a touch higher than analysts forecast, while net interest income was lower than
Wells Fargo remains under costly Federal Reserve-imposed restrictions that limit assets to their level at the end of 2017. In one of the first signs of success in the drive to escape the penalty, the company secured the Fed’s acceptance of a proposal it submitted last year.