Bloomberg News
Wells Fargo & Co. CEO Tim Sloan on Tuesday defended his troubled bank after another allegation of impropriety.
“We need to rebuild trust with our stakeholders,” Sloan acknowledged in an interview with Fox Business Network’s Maria Bartiromo. “We make sure that if there’s anything we did that’s improper with a customer, that we make it right by them, that we fix anything that needs to be fixed at the company and then we focus on going forward and building a better Wells Fargo.”
But as Bartiromo pointed out, fresh scandals seem to crop up every week, making it hard for observers to have faith that the bank is actually able to focus on going forward, rather than putting out fires.
Most recently, the Wall Street Journal reported that the Labor Department was investigating whether Wells steered 401(k) participants into individual retirement accounts, or into in-house funds that would garner more fees for the banks.
When Bartiromo mentioned the new allegations, Sloan said “these are all issues that we’ve raised our hands, we escalated, and we’re remediating our customers.”
In terms of what Bartiromo called the “fake accounts” and Sloan called the “retail accounts that we sold to customers that maybe they didn’t need,” the bank has reached out to over 120 million customers to say “if you have an issue with a Wells Fargo account, come in and see us. We’re almost all the way through that process,” Sloan said.
All the turmoil has led to calls for changes to the board of directors, senior management, and even the bank’s external auditor.
Even as Bartiromo noted Sloan’s own personal integrity, she added, “That doesn’t change the fact that you have been there 31 years and you have been part of the system.” It’s understandable that some stakeholders may say “get new blood in there,” she said.
“Most of that criticism is from people that don’t know anything about the company and candidly don’t know what they’re talking about,” Sloan said. “I think that would be absolutely the appropriate criticism if after being in this role for a year and half we hadn’t made any changes. We’ve made fundamental changes in terms of our leadership, in terms of the organization, and we’re making things right for our customers, and we’re continuing to innovate and grow this company.”
Those changes may not yet be “fundamental” enough for investors. Wells shares have lost nearly 15% in the year to date, a period when shares of a competitor like Bank of America Corp are unchanged and the S&P 500 is down 1.5%.