Sandler O’Neill + Partners says Wells Fargo‘s announcement on Thursday that it found 1.4 million more potentially unauthorized account openings than previously thought isn’t as bad as it seems because the bank reviewed a longer time period.
“It’s important to keep this in context. Yes, the number of affected accounts was up by 65 percent or so, but it is important to bear in mind they basically doubled the amount of time in their review,” banking analyst Scott Siefers said in a CNBC “Power Lunch” interview Thursday.
“Hopefully [with] today’s disclosure … this should help to bring some closure to this facet of Wells Fargo’s scandal.”
The bank revealed on Thursday it uncovered the additional potentially unauthorized consumer and small-business accounts after an independent investigation into a sales scandal that erupted last year.
However, the Sandler O’Neill analyst said Wells Fargo is still facing other fundamental issues such as weaker sales growth and potential problems in various business segments.
“Wells Fargo investors have to wrestle with what’s been a slowing top line revenue growth trend,” he said. “There’s still a litany of uncertainties out there. In that vein I think that the [valuation] discount is warranted still.”
Wells Fargo declined to comment for this story.