- Spend $30 Billion on a company stock buyback (which represents 20% of our Market cap - so that alone doesn’t add up)
- Pay out $Billions for advice from a corporate consulting company (Isn’t that what we’re paying Charlie & Co for??)
- Pay out $5 Billion in fines and penalties
- Randomly donate $1Billion here and $60 Million there
- Pay out $24.5 Million/year for Charlie and $10 Million/year for each one of his many C-Suite pals
- Spend $500 Million on a new building complex in Texas - do we need it?
- Annual Operating Expenses of over $67 Billion to rent minimally- used office buildings; and for equipment, technology, marketing, payroll etc (I’m assuming some of the above mentioned items could be included in this figure)
Traditionally, banks make their money by providing and earning interest from loans such as mortgages, auto loans, business loans, and personal loans. And yet our CEO has:
- Backed away from the mortgage market
- Stopped student loans
- Stopped offering new home equity lines and loans
- Stopped originating personal lines of credit
- No longer offering auto loans through independent dealers
- And owns a portfolio of Commercial Real Estate Loans which is rapidly declining in value (some say will crater by as much as 40%)
Yes - we do also make money from providing additional financial services to customers, and yet Charlie has:
- Sold Wells Fargo Asset Management
- Sold our Corporate Trust Services
- Exited International Wealth Management
- Sold our Institutional Retirement and Trust Business
- Shut down our Ultra-High-Net-Worth unit (a segment which EVERY other financial institution covets and is building)
On top of it all, regulators have cracked down on exploitive customer fees such as transfer fees, overdraft fees, multiple Insufficient Funds fees and other junk fees.
People say “Banks can make money with their eyes closed”. However, Wells Fargo has either intentionally cut off - or has been forced to cut off - the traditional sources of income that have kept us in business all these years (including fraud 😏).
At the most basic level - the key lesson to be learned from Madoff, Enron, Wachovia, Lehman etc is to ask whether a business itself makes sense.