Wells Fargo & Co. plummeted after reporting its first quarterly loss since 2008 as loan-loss provisions soared with the bank expecting a more severe downturn from the coronavirus pandemic.

The firm set aside a record $9.5 billion for credit losses, about $4 billion more than analysts had expected. Wells Fargo executives had warned they would earmark more for soured loans than the first quarter’s $4 billion as the pandemic continues to rage throughout the U.S. and weigh on companies and workers.

The San Francisco-based lender also cut its dividend to 10 cents a share from 51 cents. Wells Fargo said last month it would lower the payout after the Federal Reserve implemented a new rule tying dividends to earnings. The bank’s $2.4 billion loss in the second quarter was a stark turnaround from the near-record $6.2 billion in profit it posted a year ago.

“We are extremely disappointed in both our second-quarter results and our intent to reduce our dividend,” Chief Executive Officer Charlie Scharf said in a statement Tuesday. “Our view of the length and severity of the economic downturn has deteriorated considerably from the assumptions used last quarter.”

The bank’s shares have fallen 56% this year, more than double the index’s 24% slump.

Wells Fargo’s results show how bad the bank predicts things could get following a surge in unemployment and nationwide stay-at-home orders in the second quarter.

Soured-loan provisions are spiking across the industry for the second straight quarter.

The dividend cut to 10 cents was worse than the 20 cents that Bloomberg’s Dividend Forecast team had projected. One analyst, Erika Najarian at Bank of America Corp., warned Monday that Wells Fargo could eventually cut its dividend to zero.

Non-interest expenses rose to $14.6 billion from $13.4 billion a year ago. Costs in the second quarter were boosted by $1.2 billion that the firm attributed primarily to customer remediation tied to scandals in recent years. It also reported $382 million in personnel, occupancy and technology expenses tied to Covid-19.

Wells Fargo is under pressure to dramatically reduce costs and is planning thousands of job cuts to start this year, Bloomberg reported last week. The move has the potential to set a bleak precedent for an industry that’s been largely resisting mass layoffs during the pandemic.

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