Wells Fargo Sells 52 Bank Branches to Cut Costs after Scandals
In an effort to cut costs after recent scandals, Wells Fargo has agreed to sell 52 branches in the Midwest. The bank will be shutting down all of its branches in Indiana, Michigan and Ohio, as well as four branches in Wisconsin.
Flagstar Bancorp agreed to buy these locations for an undisclosed amount, but reports suggest it is just shy of $2.5 billion. Wells Fargo will be losing $2.3 billion in deposits during the sale, which could help the company keep their asset size to a minimum. Earlier this year, the Federal Reserve issued a sanction to cap the bank’s assets as they work on revamping their risk management department. However, a spokesperson told CNN this sale has “no connection” with the sanction.
Flagstar says all 490 employees currently working at the Wells Fargo branches will receive a job offer for the new bank.
Mary Mack, Wells Fargo’s head of community banking, says they will “continue to have a presence in the area” with commercial lending and mortgage lending.
In January, Wells Fargo reported they would be closing 800 branches by 2020, which will leave them with approximately 5,000 locations throughout the country.