Wells Fargo doubled its cost-cutting target after expenses soared in the aftermath of a sales scandal. Fred Katayama reports.
Wells Fargo plans to chop another $2 billion off its costs. That's on top of the same amount it pledged to slash earlier. A big chunk of the new cost cuts will come from closing branches. Wells Fargo plans to close 450 of them in 2017 and 2018. That's roughly ten percent more than its previous target. Ken Kamen of Mercadien Asset Management: (SOUNDBITE) KEN KAMEN, PRESIDENT, MERCADIEN ASSET MANAGEMENT (ENGLISH) SAYING: "I ask you, when was the last time you walked into a bank branch? We used to have to go there weekly. Now if you walk in three times a year, it's a lot. So, there is a of things going on in that industry, and, on the other side of the coin, all these banks are spending a ton of money on cyber security, infrastructure, on the technology side, so I don't know where the numbers are going to fall out, because, like retail, banking is changing how it serves its people, and the interest spread is not really helping them yet like we would have hoped." The newly announced cost cuts failed to life the bank's stock price. Wells Fargo is still recovering from a sales scandal that involved bank employees opening as many as two million unauthorized accounts.