Wells Fargo falls after news of $4bn in cost cuts
CEO Tim Sloan acts to limit the damage of a fake accounts scandal recently condemned by top investor billionaire Warren Buffett
New York — Wells Fargo dropped in New York trading on Thursday after abandoning its efficiency targets and announcing $4bn in cost cuts in the wake of its bogus-account scandal. Shares of the company fell 2.3%, the most in the KBW Bank Index, after the firm said slowing loan growth would prevent it from meeting goals that management has pursued for years. It boosted a plan to save $2bn annually by the end of next year, saying it now will cut twice as much by 2019, according to a presentation on the company’s website. CEO Tim Sloan is trying to counter the damage to Wells Fargo’s business after authorities found last year that the bank’s employees may have opened more than 2-million unauthorised accounts to hit sales goals. Wells Fargo has spent at least $445m on fines, remediation, consultants and civil litigation. On Saturday, its top investor, billionaire Warren Buffett, said managers were "totally wrong" in not acting faster to halt abuses. The new efficiency-ratio goal is 60% to...
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