- Key insight: Wells Fargo has been retreating from the home lending business for years, and negative comments by CEO Charlie Scharf raise the question of whether the bank will consider additional restructuring steps.
- What's at stake: Despite the issues in Wells' residential mortgage unit, the bank's cards and auto lending businesses appear to be picking up steam.
- Expert quote: "The consumer continues to spend, delinquencies are probably marginally better than they were the last time we talked publicly about it, deposit balances are strong, investment balances are strong," Scharf said.
Appearing Tuesday at the Goldman Sachs Financial Institutions Conference in New York, Scharf singled out the comparatively weak results of the home lending division, characterizing the unit's returns as "subpar."
"We think when we look at every one of our businesses, I would say with the exception of our home lending business, we have opportunities to grow profitability based on both returns and higher growth — and just competing," Scharf said.
The home lending group "is still transitioning to a much smaller business with higher profitability," according to Scharf, whose comments came nearly three years after the San Francisco-based bank announced plans to
In January 2023, Wells said it would shift from a nationwide mortgage lending strategy to a narrower focus on the bank's customers and underserved markets.
Since announcing that strategic pivot, Wells has seen a significant reduction in the size of its home lending business.
Its residential mortgage portfolio, which totaled $222.5 billion at the end of 2022, is down 10%. Originations, which totaled $14.6 billion in the fourth quarter of 2022, declined to $7 billion during the three months ending Sept. 30, 2025.
The falloff is even more dramatic when measured against pre-pandemic levels.
Following Scharf's remarks, a spokesperson for the $2 trillion-asset bank declined to comment on whether the company is considering additional restructuring steps. Since 2023, Wells has exited mortgage correspondent lending — purchasing loans from third parties — and reduced its servicing activity.
A number of big U.S. banks have scaled back home lending or exited the space altogether in recent months, including the $75.1 billion-asset
Still, Wells' downsizing is particularly notable, given its visibility as the country's fourth-largest bank and the fact that for many years it ranked as the banking industry's top home lender.
Even as Scharf singled out the weaker performance in home lending, he said Wells' overall consumer prospects appear to be bright. He noted that household spending remains resilient, and said that investments in the auto lending and cards businesses have begun to bear fruit.
"The consumer continues to spend, delinquencies are probably marginally better than they were the last time we talked publicly about it, deposit balances are strong, investment balances are strong," Scharf said Tuesday. "The overall spend levels continue to be very strong, probably a touch higher in [recent weeks] on a year-over-year basis."
Scharf, who has been Wells' CEO since 2019 and took over as
"The consumer bank is showing improving momentum, supported by maturing investments and steady progress across card and auto," Steven Alexopoulos, an analyst who covers
