Thread regarding Wells Fargo & Co. layoffs

@1jyu+1q2o6tBP

It's patently obvious that the C Suite doesn't know the first thing about leadership, and I don't see any evidence that they know anything about banking or resolving regulatory issues either.

Do they care what I think? Obviously not, but that doesn't mean they are right. The market cap perf of this company tells us a lot about how this exec team is doing. From 2014-2018 our cap hovered around $275B, now it's $160B or so. So in spite of a huge amount of inflation / currency devaluation, we're still down over 40%. Maybe these incompetents SHOULD be listening more and caring more.

I'm sure the C suite will read everyone's suggestions here, and give it serious consideration 😄😄😄

I know everyone thinks they have the world figured out, but stay in your lane, people. If you were 10% as smart as you think you are, you wouldn't be a lemming employee. You'd have accomplished far more by now. Rejoice that your ignorance is ignored.

I don't think there will be a break up per se, Shart will just ki-l several large/critical parts of the company and what's left won't be of much interest to anyone else so the remnant will soldier on, a shadow of its former self. Selling off chunks of the company might be good for WF, and Shart isn't here to do anything positive for WF. Here's here to fire all of us and damage the company as much as possible.

Doesn't the title in itself prevent the breakup? If they are so important, seems it couldn't be broken up

Agree. This "bank" is a lost cause.

the giver would never let it happen, not because of all our banking assets but because they don't want the affect of 200K layoffs on the economy, although by the time CS is done that will be less of a concern.

@mfx+1q2o6tBP That’s if we’re selling our businesses exclusively to JPMorgan, BofA, and/or Citi, that’s not what I’m suggesting. See my comments below. And it’s likely that none of our CIB businesses (the first thing they will look at if interested) will be attractive to these three banks. Any acquisitions need to be a market share grab for them, but our CIB business is too weak for them to buy. Maybe certain loan portfolios. Citi could be interested in our MMB business and deposits, as they are trying to refocus on the US market.

@rzg+1q2o6tBP It’s quite simple in theory, although execution could be difficult cause sequencing matters (e.g. you can’t completely break up or sell your deposits business while keep having your loans business) and you ideally need to have multiple buyers interested in different business lines at the same time. If you can self sustain a business line on a standalone manner, great, if not, you can just liquidate or sell it to a suitable buyer.

If I were the regulator who wants to break Wells up, I’d probably reverse every action taken since the acquisition of Wachovia by selling or reducing non-core business lines. We’ve already been doing that to a certain extent. The sale of the asset management business is a case in point. Exits (e.g. correspondent lending) or a significant scale back (e.g. mortgage lending) are also examples.

As next steps, I’d suggest the following
Consumer banking—continue to identify sub-LOBs that need to be scaled back or exited. Follow the example of Citi and sell or close down branches bit by bit (although we won’t be doing it on an international scale)
Middle market banking—exit some businesses (e.g. leasing and cdf) and sell some business portfolio in chunk to other regional banks
CIB—exit most of the markets business (good to have for cross selling but too weak and can’t grow anyway to be scalable), exit M&A advisory and other IB businesses not directly ancillary to lending, stop any product development initiatives, completely exit international everywhere, including Europe (again, same as markets, can’t grow meaningfully to be scalable and already overcrowded/overbanked), gradually reduce commitments/loans provided to large clients and exit any relationships below an even higher ROE (25%-30%) threshold
Corporate—continue to identify any sources of inefficiency and redundant works (there are plenty)

You continue to do the above and once you have sub-1 trillion assets and then it’s easier to sell the remaining business as a whole or just liquidate.

"For the sake of the American economy..."

C'mon now, that's a bit melodramatic. No one is staying up late worried about how their fellow countrymen are doing.

People bring up "breaking up the bank" every once in a while, but don't seem to understand what that really means.

A true breakup would be splitting LOBs off as their own sink-or-swim entity. Do you want to work for such an entity? 90 hours a week to keep the place a float?

I wonder how viable a bank would be (especially as an employer) if they had checking and savings, but no credit cards. Or no loans. Guess what your comp would be at such a place.

Let's try it from this angle. Describe a breakup scenario that benefits employees, customers, and shareholders.

Don't be surprised if you can't think of even one scenario that represents an improvement to all 3 stakeholders.

This is one of those situations where it's better that cries go unheard. It's like when a young kid is angry at mom or dad, and prays/wishes something bad upon them. If their wish actually came true, they'd instantly know their mistake, but it'd be too late.

@OP's solution to too many systematically important banks is to get rid of one and consolidate the points of failure into an even smaller number of systematically important banks. At least it'll make our market crashes more efficient.