Wells Fargo to close 900 branches

Wells Fargo to close 900 branches

As it books a $3.25 billion fourth quarter pre-tax charge related to the misselling scandal, Wells Fargo says it plans to make savings by closing around 900 branches by 2020.

Reporting its quarterly earnings, the US bank says that the pre-tax hit relates to "mortgage-related regulatory investigations, sales practices, and other consumer-related matters".

Although Wells is also benefiting from the recent US corporate tax cut to the turn of $3.4 billion, the bank is looking to save $4 billion a year by the end of 2019 through an efficiency drive.

At the centre of this is a branch closure programme. Wells intends to reduce its network from nearly 5900 to around 5000 by the end of 2020, with 250 closures this year.

Other savings will come through "rationalising call centre and operational capacity" as well as technology application rationalisation, and third party expense savings.

Meanwhile, AML, cyber, innovation and "technology transformation" are all set to receive an investment boost.

For the fourth quarter, Wells posted a year-on-year net income rise of 17% to $6.15 billion, or $1.16 a share.

Comments: (1)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 15 January, 2018, 13:13Be the first to give this comment the thumbs up 0 likes

900 branches on a baseline of 5900 branches works out to a little over 15%. Assuming that the remaining 5000 branches is the Ideal Branch COunt as I defined in Why Branch And Digital Channels Will Coexist Forever, WF's actual IBCO% is 85%. Looks like my estimate that "IBCO will be around 60% of current branch count" understates banks' need for branches.