Wells Fargo to shutter more than 400 branches

by Ryan Smith16 Jan 2017
Wells Fargo will shutter more than 400 branches in the next two years as it seeks to cut costs.

The nation’s largest mortgage lender is looking to trim about $2 billion in costs by the end of 2018, according to a Bloomberg report. The bank closed 84 branches in 2016, mostly in the second half.

The bank has had plenty of troubles lately. On Friday, it announced its fourth-quarter earnings – $0.96 per share on revenue of $21.58 billion, according to a Business Insider report. That’s a significant underperformance from expectations of $1 per share on $22.45 billion.

The Q4 miss and the planned branch closings come on the heels of the bank’s costly fake-accounts scandal. Last year, it was revealed that Wells Fargo employees opened 2 million customer accounts without those customers’ knowledge or consent.

The scandal had far-reaching consequences. Wells Fargo had to pay $185 million in penalties and weather congressional heartings, and CEO John Stumpf was forced to step down. The bank’s board began an internal investigation into the scandal, which shined a spotlight on lenders’ practice of setting sky-high sales goals for employees. Indeed, Wells Fargo whistleblowers said that the bank’s unrealistic sales goals pressured employees to commit fraud just to keep up.

Wells Fargo has seen new account openings  plummet since the scandal came to light. New accounts fell by 44% year over year in October and 41% year over year in November, according to Business Insider.

 

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