Wells Fargo is facing pressure from shareholders to provide more information about when its regulatory woes are likely to subside, but the embattled bank is refusing to play along.
“That whole ‘mission accomplished’ thing has failed for other people before,” Wells Chief Financial Officer John Shrewsberry said Wednesday at an investor conference in response to a question about whether the bank would be willing to establish a timetable. “I don’t think you’re going to hear those words. We’re just going to keep trying to get better all the time.”
The $1.9 trillion-asset bank, which last month was fined $1 billion for mortgage and auto insurance abuses, remains under a microscope.
Wells has disclosed that it is reviewing activities within its wealth management division in response to inquiries from federal agencies. The company’s foreign exchange business is similarly under internal review.
Last year and early this year, some employees in the company’s commercial banking unit improperly altered customer information in an effort to meet a regulatory deadline, according to the Wall Street Journal.
Wells is also operating under an agreement with the Federal Reserve Board that caps its asset size. CEO Tim Sloan said recently that the company is expecting those restrictions to remain in place for longer than initially anticipated.
Shrewsberry argued Wednesday that the bank’s efforts to comply with the Fed’s requirements will yield benefits to the company. Wells Fargo wants to make its operational risk and compliance efforts, the area where the Fed is demanding improvements, as strong as its credit risk management, he said.
“That’s Tim’s goal as our CEO. That’s our board’s goal,” he said. “Everything’s on the table for change, which didn’t used to be the case. There are huge technological investments that are appropriate and necessary to position ourselves to succeed in the mobile and digital future.”
At the same time, Wells is also under pressure to cut costs aggressively in the face of stagnant loan growth. The bank expects to reduce its expenses by $2 billion annually this year and next.
“While it’s a lot of work, and I wouldn’t have mapped it out this way, we’re taking advantage of the fact that everything is on the table to improve the company for the future,” Shrewsberry said.
Wells Fargo’s reputational crisis began in September 2016 when regulators determined that thousands of employees had opened as many as 2.1 million customer accounts without their permission. The estimated number of fake accounts was later revised to as high as 3.5 million.
Those revelations led to a broad outside review of the company’s sales practices, which Shrewsberry said Wednesday is virtually complete.
The scandals have damaged Wells Fargo’s brand, a fact that the company acknowledges in a new advertising campaign that uses the tag line “Established 1852. Re-established 2018.”
Shrewsberry said Wednesday that the ads are aimed at people who are not Wells Fargo customers and may be shopping for a bank. He maintained that the bank’s relationships with its existing customers are very strong, since those relationships are based on the customers’ own experiences.