Hiring outside CEO will help Wells Fargo but full turnaround will take a long time, analysts say GlobeBusiness
Wells Fargo & Co.’s plan to bring in an outsider as its next chief executive could give the scandal-plagued bank a much needed fresh start, but a turnaround will not be easy for whoever takes the helm, analysts said.
Wells Fargo shares were down 2.2 per cent to US$48.02 on Friday, after jumping more than 2.7 per cent after the bank announced Sloan’s resignation on Thursday. Admissions by the bank that it opened potentially millions of unauthorized accounts and improperly charged customers for services have resulted in billions of dollars in fines and settlements since 2016.
Sloan twice disappointed investors by pushing back the date he expected to get the asset cap removed. Wells Fargo executives did not provide new information about when they expected the Fed to lift the asset cap on Thursday. “I think the new CEO is going to take the path of trimming costs and buying back stocks and you still won’t see a lot of balance sheet expansion in terms of loan growth because they are under that cap,” said Edward Jones analyst Kyle Sanders.
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