Wells Fargo slashes dividend 85% to 5 cents

NEW YORK -- The bank said it will cut its dividend to 5 cents from 34 cents. The next dividend is expected to be declared in April.

Wells Fargo is the latest of the money-center banks to to cut its dividend to shore up capital as a buffer against future losses.

Although Wells Fargo has long been considered one of the stronger players in the banking sector, the company has recently faced increased scrutiny from analysts and investors who are worried about its capital levels. There is concern that losses related to the company's acquisition of troubled Wachovia will be bigger than anticipated. In recent weeks, its stock has taken a beating as investors fear it could be the next big bank in need of a government bailout.

Following initial injections of $25 billion into the nation's top four banks including Wells Fargo, the government has had to pump billions more into both Citigroup and Bank of America to stave off a major failure.

Wells Fargo's shares have fallen 72.5% so far this year. The stock has lost 25% this week alone.