John Stumpf, chief executive officer of Wells Fargo & Co. Photographer: Brendan Smialowski/Bloomberg
Wells Fargo & Co., the fourth-largest U.S. bank by assets, said it will eliminate 3,800 jobs and close its consumer-finance unit.
The lender will take a charge of $185 million, with $137 million, or 2 cents a share, taken in the second quarter, the San Francisco-based company said today in a statement. The unit will close 638 independent consumer-finance branches and stop making non-prime home loans, the statement said.
“The economics of a separate Wells Fargo Financial channel are no longer viable, especially now that our customers have access to the largest banking and mortgage store network in the United States,” David Kvamme, president of Wells Fargo Financial, said in the statement.
Wells Fargo is the top mortgage lender in the U.S. and the fourth-largest bank after purchasing Wachovia Corp. for $12.7 billion in 2008. Auto, home and credit-card loans will continue to be made from retail branches. Less than 2 percent of the bank’s real estate loans were originated in the Wells Fargo Financial network, according to the statement.
Wells Fargo Financial is the division that sold consumer loans and mortgages, including subprime at one time and home equity loans, to borrowers with blemished credit.
To contact the reporter on this story: Dakin Campbell in San Francisco at dcampbell27@bloomberg.net
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