It is hard fathom the shame Wells Fargo brought to the banking business with rogue accounts and shameful practices but you can be sure there will be cultural change as Charles Scharf takes the reins.
There is, indeed, a new sheriff in town.
- Wells Fargo & Co (N) on Friday named banking veteran Charles Scharf its next chief executive officer, ending a six-month search for a new leader to turn around the fortunes of the scandal-plagued bank, sending its shares up more than 4%.
- Scharf, who joins the fourth-largest U.S. bank effective next month after a 2-year stint leading Bank of New York Mellon (N), will become Wells Fargo’s third CEO in as many years.
- At Wells Fargo, Scharf is taking over a bank that is still operating under a regulatory microscope, trying to rebuild its reputation with customers, investors and politicians. He struck an upbeat tone on a call with analysts.
You can be sure that the Wells’ card business will be a focus.
- Prior to joining the custodian bank, Scharf held the top job at Visa Inc (N), the world’s largest payment network. He started his career in 1987 at Commercial Credit Corp, a consumer finance company run by Jamie Dimon and Sandy Weill – executives who went on to lead two of America’s biggest banks.
- he appointment got a non-objection from the Office of the Comptroller of the Currency, one of Wells Fargo’s main regulators. “The appointment of Mr. Scharf removes a major overhang,” Saul Martinez of UBS wrote in a note to clients. “We think getting past the heavy lift of the consent order is necessary for Wells to be able to reduce its cost base.”
- Shares of Wells Fargo were up 4.15% at $50.90 in midday trading.
At 54 years old, Mr. Scharf has plenty of time to make his mark at Wells Fargo, and with is Chase and Visa focus, expect him to torque up competition in the U.S. cards business.
Overview by Brian Riley, Director, Credit Advisory Service at Mercator Advisory Group