Wells Fargo’s new CEO fails to impress

Tim Sloan took charge of the bank on 12 October, replacing John Stumpf who resigned to help quell a 5-week public furore over the bank’s $185 million settlement with the government


Photo: Reuters
Photo: Reuters

Tim Sloan had a rocky Wall Street debut as Wells Fargo & Co.’s chief executive officer, as he announced a drop in profit and frustrated analysts hungry for information on the consumer banking scandal that prompted his appointment.

The scene on 14 October, as the San Francisco-based bank posted third-quarter results, left the company’s stock among the worst performers in the KBW Bank Index of 24 big US firms. It was another sign investors may share concerns expressed in recent weeks by lawmakers, who’ve questioned how employees could open legions of accounts without customers’ permission over half a decade and whether managers are being held accountable.

“Our board is conducting an independent investigation into our retail-banking sales practices and related matters, and we’re not in a position to discuss those topics today,” Sloan, 56, said just before taking questions on a conference call to discuss earnings. Several analysts unsuccessfully pressed for specifics about the scandal anyway.

Sloan took charge of the bank on 12 October, replacing John Stumpf who resigned to help quell a 5-week public furore over the bank’s $185 million settlement with the government, over allegations that employees may have opened millions of unauthorised customer accounts.

On the analyst call, Sloan deflected questions about whether the bank’s board considered appointing an outsider as CEO and how the scandal may shape his approach to the role. He deferred most queries about sales abuses, saying that he wanted “to be very respectful” of the board’s continuing investigation.

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