Wells Fargo & Co (WFC) will cut its quarterly dividend by 80.4 percent to 10 cents per share in 2020. This will end nine consecutive years of dividend increases by the financial services company. Last year Wells Fargo raised its quarterly dividend twice for a total increase of 18.6 percent.

The lower dividend of $0.10 per share will be payable September 1, 2020 to stockholders of record on August 7, 2020. A new annualized dividend rate of $0.40 per share yields 1.6% at a stock price of $24.43. Warren Buffett's Berkshire Hathaway is one of the biggest shareholders in Wells Fargo.

In its press release dated July 14, 2020 Wells Fargo reports second quarter 2020 results and announces the big dividend cut. Chief Executive Officer Charlie Scharf said, “We are extremely disappointed in both our second quarter results and our intent to reduce our dividend. Our view of the length and severity of the economic downturn has deteriorated considerably from the assumptions used last quarter, which drove the $8.4 billion addition to our credit loss reserve in the second quarter. While the negative impact of the pandemic is unprecedented and many of our business drivers were negatively impacted, our franchise should perform better, and we will make changes to improve our performance regardless of the operating environment.

Previously Wells Fargo also announced a big dividend cut of 81.3 percent during the financial crisis in 2009. After the big cut in 2020 the annual dividend payment to shareholders will drop to $1.64 billion. In the previous two years Wells Fargo had announced double digit dividend hikes. The stock has lost more than half of its value year-to-date.

Other companies announcing dividend cuts recently are Simon Property Group (SPG) and Molson Coors (TAP).

Wells Fargo & Company is a financial services company. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, investments, mortgage, and consumer and commercial finance through thousands of  office locations, ATMs, the internet (wellsfargo.com) and mobile banking. The company has three operating segments: Community Banking, Wholesale Banking, and Wealth and Investment Management.