Yesterday on a conference call with 500 of his closest friends, Wells Fargo CEO John Stumpf said that the current situation the bank finds itself in, on account of opening millions of fake accounts in clients' names, is gonna get a lot worse before it gets better. He mostly referred to the affect the wrongdoing will have on attracting new retail business but presumably is also expecting more savage beatings by Congress (and his "grandchildren"), plus daily reports of Wells knowing about the unethical practices years before it claims while also systematically retaliating against employees for attempting to blow the whistle.
“To say the last month has been difficult is an understatement,” Mr. Sloan said on the Monday call. “It’s going to be harder for a while, and we get that.” Wells Fargo paid a $185 million settlement with regulators and a city official about a month ago. It has since faced public outrage, two congressional hearings and a raft of federal and state inquiries, including by the Justice Department. Mr. Stumpf, who the board said last month forfeited $41 million in pay related to the issues, said he visited a number of branches late last week and “clearly this has not helped.” He said the net new business in the retail bank “will be down for a while; there’s just no question about that.”
But it's not all bad news! Apparently the whole affair, while uncomfortable as it relates to the category 5 sh*t-storm of bad press it's generated, won't really hurt Wells at all money-wise, which is what really matters. But keep that bit of info on the down low!!!
Chief Financial Officer John Shrewsberry, responding to an executive’s question on the call, said other than “some legal set asides” there isn’t much different in the bank’s third-quarter earnings due to some states suspending business with the bank. He added that those public announcements aren’t “really amounting to much in terms of dollars yet.” But the CFO said the bank likely wouldn’t say this publicly: “We probably won’t broadcast that because it might incentivize people to do more, to make it tougher on Wells Fargo, but the story line is worse than the economics at this point.”
You guys will keep quiet, right?