US banking group Wells Fargo has announced plans to shut down 400 branches over the next two years.
The bank said that it plans to close 200 branches this year and over 200 branches in 2018. This comes on top of the 84 branches already shuttered in the previous year.
The announcement comes as the banking group recorded a net income of $5.27bn for the fourth quarter of 2016, down 5.5% compared to $5.58bn in the fourth quarter of 2015.
Wells Fargo’s community banking unit posted net income of $2.73bn for the fourth quarter of 2016, a 13.7% decline from $3.17bn during the same quarter in 2015. The division’s total revenue during the quarter dropped 5.4% to $11.66bn from $12.33bn a year ago, while noninterest expense rose 1.3% year-on-year to $6.98bn.
Wells Fargo CFO John Shrewsberry said: “Wells Fargo had solid underlying performance in the fourth quarter as we continued to benefit from our diversified business model. Net interest income increased from the prior quarter, largely driven by growth in loans and investments, as well as higher interest rates.
“Noninterest income declined from the prior quarter due to net hedge accounting ineffectiveness associated with our hedging of long-term debt as part of our asset/liability management program, as well as lower market-sensitive revenue.
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“Other sources of noninterest income were diversified and stable with the prior quarter. Credit quality remained solid in the quarter, and we returned $3.0 billion to shareholders in the quarter, with a full year 2016 net payout ratio of 61 percent."