Tarnished banking giant Wells Fargo said Thursday it will cut an additional $2 billion in costs each year as it aims to restore its reputation following a fake bank accounts scandal.
The leader in mortgage lending said it will slash another $2 billion annually by 2019 through a variety of measures, such as greater use of automation, outsourcing and reducing the number of bank branches as more customers use digital technology.
Those cuts are on top of $2 billion in annual savings previously announced which are expected to take effect by 2018.
The bank plans to close 450 branches this year and next, a move that responds to greater consumer use of digital banking programs.
Wells Fargo has been under pressure since last fall after news broke that it had opened some two million deposit and credit card accounts without customers approval or knowledge.
The company reached a $185 million settlement with regulators in September 2016, and has demanded executives responsible repay a large share of their compensation.
The scandal prompted bruising hearings on Capitol Hill and led to a sharp decline in new accounts from consumers.
Chief executive Tim Sloan said the bank was addressing the flaws that led to the fake accounts scandal and had taken a number of actions, such as eliminating product sales goals for retail bank staff.
“We’re emerging as a better bank,” Sloan told analysts at an investor day in San Francisco. “We have an unwavering commitment to fix anything that went wrong.”
In response to the scandal, Wells Fargo has increased compliance staffing and spent more on legal settlements, spending that dented earnings in the first quarter.
Shares of Wells Fargo fell 2.3 percent to 53.46 in mid-morning trading.
Join GhanaStar.com to receive daily email alerts of breaking news in Ghana. GhanaStar.com is your source for all Ghana News. Get the latest Ghana news, breaking news, sports, politics, entertainment and more about Ghana, Africa and beyond.