S&P revises Wells Fargo to negative

S&P said it revised its outlook on Wells Fargo & Co. and its main operating subsidiaries, including Wells Fargo Bank NA, to negative from stable.

At the same time, the agency affirmed the A/A-1 issuer credit ratings on Wells Fargo and the AA-/A-1+ issuer credit ratings on Wells Fargo’s main operating subsidiaries. The group credit profile remains a+.

"Our outlook revision reflects the increased business risks for Wells over the past few weeks, stemming from accelerated reputational issues from the Sept. 8 news of the company's retail accounts sales misconduct over recent years," S&P credit analyst Barbara Duberstein said in a news release.

Uncertainty has increased, in the agency’s view, regarding the scope and ramifications of the misconduct, the duration and magnitude of the reputational damage, the possible impact on the company's customer flows and the potential consequences of ongoing legal and regulatory investigations.

Additionally, the company's management team and retail business model are unexpectedly in transition as a result of this misconduct, and this may lessen S&P’s view of the company's business stability relative to highly rated peers.

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