On Tuesday, Wells Fargo CEO Charlie Scharf predicted higher-than-expected severance costs in Q4, ranging from $750 million to slightly less than $1 billion.
Wells Fargo CEO Charlie Scharf told investors on Tuesday that he expects to incur higher-than-expected severance expenses in the fourth quarter, which could be anywhere from $750 million to just under $1 billion.
Last month, the bank laid off just under fifty bankers from its corporate and investment division. This followed a recent warning from the San Francisco-based lender that it would cut staff even more in an effort to boost productivity.
It continues to function under an asset cap that restricts it from expanding until authorities determine that issues arising from the bogus accounts scandal have been resolved. Nine open authorizations from banking regulators that demand more scrutiny of the bank's operations are still in effect.
The fourth-biggest U.S. bank's industrial real estate portfolio has seen considerable erosion, particularly with relation to the office loans. To cover potential credit losses on commercial real estate, Wells Fargo set aside $359 million in the third quarter. This increases the overall value of provisions for the initial nine months of 2023 to $2.6 billion.
Scharf said he is cautious about 2024 even though the interest rates remain high and there are worries about a potential recession, but the economy is still robust.
In addition to decreasing the amount of mortgages it services, Wells Fargo has been originating fewer auto loans.
