[NEW YORK] Wells Fargo & Co lost its title as the world's most valuable bank to JPMorgan Chase & Co.
Wells Fargo, which is grappling with the fallout from claims that its employees created fake customer accounts, slumped 3.3 per cent to close at US$46.96 Tuesday in New York. That reduced the firm's market value to US$236.9 billion, compared with US$240.3 billion for New York-based JPMorgan.
Wells Fargo was fined US$185 million last week after the Consumer Financial Protection Bureau accused bank employees of creating deposit and credit-card accounts without clients' approval to reach sales goals.
Chief executive officer John Stumpf has been asked to testify in Washington about the alleged misconduct, while the San Francisco-based bank agreed to eliminate sales goals for retail bankers, effective Jan 1.
"The company's operations are being impacted by the investigation," Piper Jaffray Cos analysts led by Kevin Barker said Tuesday in a note.
"The financial tailwind from the sales mishaps was immaterial to the company's fee revenue, but the elimination of product sales goals could materially change how the company's retail banking segment operates and the fee revenue it generates."
Bank stocks also were pressured Tuesday as traders reduced bets that the Federal Reserve will increase interest rates at next week's meeting. JPMorgan fell 0.8 per cent, while the 24-company KBW Bank Index slid 1.6 per cent, extending its decline for the year to 2.7 per cent.
Wells Fargo and JPMorgan are among the top 20 largest firms by market capitalisation globally. Apple Inc, the biggest, is valued at more than US$582 billion, while Google parent Alphabet Inc is second at US$531 billion.