Wells Fargo & co. will cut its stock dividend by 85 percent to retain an additional $5 billion in common equity this year as a precaution about possible worsening in the credit cycle, the company said.
This was a very difficult decision but it’s absolutely right for our Company and our shareholders because it will further strengthen our ability to grow market share and to continue our long track record of profitable growth,” said President and CEO John Stumpf.
Stumpf said the company’s operating results in the first two months were “strong.”
He added that the company’s merger with Wachovia was on track.
The additional money will go for “creating a larger capital cushion in the near term to protect against a more adverse credit cycle if it occurs.”