![]() With Brokerage Cash Services, deposits to investment accounts can also be made with tellers at Wells Fargo branches. It enables access to online and mobile banking with mobile deposits 2 including the ability to make online and mobile IRA contributions, access to Zelle℠, Bill Pay, online wires, transfers and direct deposit (i.e., annuity and Social Security payments and payroll deposits). Bloomberg reported Thursday that Wells is in talks to sell its asset-management business to a private-equity consortium.Wells Fargo Advisors’ Brokerage Cash Services is an enhanced brokerage feature that combines investing with easy access to digital banking providing seamless navigation between online banking, brokerage, transfers, and bill pay platforms with a sweep of cash balances. The student loan portfolio sale is part of Scharf’s plan to divest business lines that are not considered core to the franchise. The company’s fourth-quarter performance was also affected by restructuring charges and accruals for customer remediation that totaled $1.1 billion, partially offset by a $757 reserve release in connection with the planned sale of the firm’s private student loan portfolio. ![]() Net interest income decreased by 17% to $9.28 billion amid low interest rates and sagging loan demand. “And so once you get a series of efficiencies, it helps you look at everything else that’s left as well.”ĭuring the fourth quarter, Wells Fargo reported net income of $2.99 billion, which was up 4% from the same period a year earlier. “It’s like peeling an onion back,” Scharf said. Though Wells’ to-do list includes projects that executives believe will result in expense cuts totaling $8 billion, company officials also said that they believe additional savings can still be found. “I was pleased with what they put out today,” he said. Kyle Sanders, an analyst at Edward Jones, noted approvingly that Wells Fargo expects to realize much of the projected gross expense reductions in the coming year. The market’s response was not uniformly negative. “How much under-investing has been done in the last decade-plus that needs to be caught up on?” “There is ongoing fear, or risk, that the amount of investment that’s needed is still an unknown,” said Brian Kleinhanzl, an analyst at Keefe, Bruyette & Woods. In 2021, the company has identified $3.7 billion in efficiency initiatives, but it also expects $2.7 billion in new spending on compensation, investments in technology, regulatory work and other items. “Though we believe we’re making meaningful progress, there is substantial work to do,” Scharf said Friday during a call with analysts.įurther tempering the reception to Wells Fargo’s plan was the reality that much of the anticipated cost savings are likely to be offset by higher spending in other areas. But the firm pointed to the three-year-old asset cap, which seems unlikely to be lifted in 2021, as a key source of uncertainty about when cost savings can be achieved. Overall, the $1.9 trillion-asset company said that it has identified roughly 250 efficiency initiatives it expects to execute over three to four years. Wells Fargo also said that it will lower its real-estate expenses substantially, with total office space to be reduced by 15% to 20% by the end of 2024. Increased automation in the company’s consumer lending businesses, particularly mortgages and auto loans, would yield another $1.1 billion in savings, with a similar amount of money expected to be squeezed out of the firm’s commercial banking unit. After closing 329 branches last year, Wells Fargo plans to shutter 250 more in 2021. Nearly $3 billion in savings would come from what the bank calls optimization of its organizational structure, which includes eliminating layers of management.Īnother $1.6 billion would be saved by closing more branches and reducing staffing at locations that remain open. Under the plan unveiled Friday alongside Wells Fargo’s fourth-quarter earnings results, future expense cuts are broad-based. The low interest rate environment and an asset cap imposed by the Federal Reserve Board in 2018 are both limiting its ability to generate more income. The company has a substantially larger expense base as a percentage of its revenue than other large U.S. Aggressive cost-cutting is needed to boost the competitive position of Wells, which has been forced to spend heavily to clean up a series of scandals.
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