On March 6, 2009, Wells Fargo bank announced that it would slash 85% of its dividend which would reduce the price to a nickel per share. According to Wells Fargo, this move will save them approximately $5 billion per year. Wells Fargo is a San Francisco-based bank which took over Wachovia Corp. five months ago.

The bank refused to confront its investors about their decision to slash the dividend through a conference call. Wells Fargo also confirmed their strong position this year as their shares increased by 7% recently to $8.69.

Wells Fargo is not the first bank to cut its dividend during this economic crisis. Most of those banks that survived the banking crisis such as JPMorgan Chase & Co., PNC Financial Services Group Inc and US Bancorp have decided to cut their dividend by 85%.

Wells Fargo recently took $25 billion from the government in shares and through this cut, they plan to pay the government as soon as possible. John Stumpf, president and chief executive, said, “These actions will help us repay the government’s investment at the earliest practical date.”

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