Wells Fargo’s new chief executive has announced a major management shake-up of the business in an attempt to improve its image following a string of scandals.
America’s fourth-largest bank said in a statement it is making “fundamental changes” to the way it manages operations, including overhauling its reporting lines and splitting its three business units into five.
This will be the first major restructure of the bank for Charles Scharf, who was appointed as chief executive in October 2019.
The changes are being viewed as Mr Scharf’s attempt to put in place a new corporate structure in an effort to rebuild its reputation and increase accountability, the company said.
In 2016, Wells Fargo was embroiled in one of the biggest banking scandals in history after it was revealed it created 1.5m fake deposit accounts and more than 500,000 fake credit cards without customers’ permission.
Wells Fargo employees said they felt compelled to create the accounts due to extreme sales pressure.
Since the scandal was exposed, Wells Fargo has paid more than $1.7bn in fines and two of its chief executives, John Stumpf and Tim Sloan, departed the bank.
Each of the five new business units created by the restructure will be led by its own chief executive.
Mike Weinbach will become head of consumer lending, a newly created position, responsible for home lending, auto loans, personal loans, credit cards and merchant services.
Weinback, who was previously chief executive of home lending at J.P. Morgan Chase, will join Wells Fargo in May.
Mary Mack, who most recently led consumer banking at Wells Fargo, will become head of consumer and small business banking, which includes the company’s 5,400 branches and range of deposit, lending, investment, and payment products.
Perry Pelos, who previously led wholesale banking, will move into the new role of head of commercial banking, while Jon Weiss will become head of corporate and investment banking, which was previously part of wholesale banking.
The company said it will conduct a search for a new chief executive of wealth and investment management to complete the five divisions.
Commenting on the overhaul, Scharf said, “These changes create the right structure to build our businesses over the long term and increase our ability to successfully execute on our top priority, which is the risk, regulatory, and control work.
“I am confident that this organizational model and our strengthened risk and control foundation will bring greater focus and accountability to the company.”
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