Nupur Anand, Lananh Nguyen
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By Nupur Anand, Lananh Nguyen
NEW YORK (Reuters) -Wells Fargo CEO Charlie Scharf knows he has a reputation for sternness, but he said that when the bank was finally freed of a $1.95 trillion asset cap by regulators on Tuesday, he became emotional.
"Everyone thinks that I'm this tough, tough person ... but it's been so long in the making, it's impacted so many people so negatively," Scharf said. "All of a sudden, it's like it's all been worth it and everyone's feeling it."
Scharf, 60, took the helm at Wells Fargo in 2019, vowing to repair its deeply entrenched problems from a fake-accounts scandal that erupted in 2016. The bank faced a public outcry, was blasted by lawmakers and slapped with billions of dollars in fines.
The Federal Reserve's decision to lift one of Wells Fargo's last major punishments this week has largely closed that chapter in its history. It also cements Scharf's legacy after a grueling turnaround in which he overhauled management, slashed headcount and shed businesses.
"I feel great," Scharf told Reuters in a wide-ranging interview on Wednesday after being inundated by congratulatory messages from employees and counterparts at other banks.
He is turning his focus to growth after serving almost six years as Wells Fargo's fixer-in-chief. He plans to expand further in credit cards and investment banking, while also investing in wealth and commercial banking.
It will not expand in mortgages, he said. The bank exited many of those operations after they were beset by scandal.
As Wells Fargo aims to increase earnings, it plans to raise its dividend to keep payouts consistent for investors, Scharf said. Share buybacks will continue, but their pace will probably slow as the bank invests in growth, he said.
Scharf, who previously ran BNY and Visa, took over scandal-plagued Wells Fargo after his two predecessors were ousted. He installed new leadership, slashed more than 55,000 jobs, exited unprofitable businesses and reworked the bank's risk management and controls. In an effort to transform its culture, he also reworked the company's performance review process to boost accountability.
Wells Fargo shares were up 0.5% on Wednesday afternoon, having climbed more than 8% so far this year as investors became more optimistic about the bank shedding its regulatory baggage.
"The pressure, by the way, for me - it doesn't go away, it just changes" from focusing on historical problems to future growth, Scharf said. "I'm not going to work any less hard, I'm not going to feel any less pressure, I'll probably have more fun."
