One of the listeners on the call recorded its contents, which was then leaked to the WSJ:
Wells Fargo & Co.’s top brass laid out the bank’s strategy to move past its sales-tactics scandal on an hour-long call Monday with 500 senior executives, according to a recording of the call reviewed by The Wall Street Journal.
The executives said growth in new retail banking business likely would be down due to the scandal. But they added that efforts by some states to penalize the bank by suspending parts of their business weren’t having much effect.
The call was led by CEO John Stumpf, who along President and Chief Operating Officer Timothy Sloan admitted the bank still faces significant challenges:
“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.”
The news wasn’t all doom and gloom, however. Wells Fargo is still opening more accounts than they’re closing, noted Sloan, and although checking account growth has slowed recently, it’s still seeing positive growth. The company also said that while “some legal set asides” will be necessary to address the account-opening scandal, that municipalities canceling business isn’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 storyline is worse than the economics at this point.”
In terms of restoring its reputation, the company said during the call that it was improving its oversight methods, implementing clearer chains of command, and boosting its customer outreach.
More details about the scandal’s effects on WFC’s business — and its turnaround plans — will likely be revealed on Friday, when the company delivers its third quarter earnings report before the opening bell.
Wells Fargo shares fell $0.14 (-0.30%) to $45.51 in Tuesday morning trading. Year-to-date, WFC has plunged 16.13%, versus a 4.94% rise in the benchmark S&P 500 during the same period.