Wells Fargo recently announced that it will be shutting down all current personal lines of credit and received a lot of criticism for the same. This extreme step might make you think- Is Wells Gargo going out of business?
The internet is flooded with news of many major retailers shutting down, and it’s not even surprising anymore. But such shocking moves are also coming from banks and financial institutions.
So what can probably be the cause of the same? Keep on reading to find out!
About Wells Fargo
Wells Fargo is a multinational financial services company and is considered one of the big four banks alongside Bank of America, JP Morgan Chase, and Citigroup.
Founded on March 18, 1852, by Henry Wells and William G. Fargo, Wells Fargo is one of the oldest banks in America.
This bank has survived and thrived during times of war and depression and continues to grow today.
However, Wells Fargo was once known for their integrity and exceptional services until the fake account scandal happened.
So in an effort to fix the image, the company is trying its best to employ the needed changes.
Is Wells Fargo Closing Branches?
Wells Fargo has been closing plenty of branches over the last few years. The company shut down a total of 267 branches in 2021, more than any other bank.
Even in 2022, the company shuttered a lot of branches, leaving only 4,598 locations, down from 4,777 branches.
Customers will see more Wells Fargo closures this year, and Wells Fargo has already closed down locations in Montana, California, North Carolina, Pennsylvania, New Jersey, Texas, Florida, Utah, New Mexico, Virginia, and Washington.
List Of Wells Fargo Closing Branches 2023
So here’s a list of Wells Fargo branches that are set to close in 2023:
Virginia
- 122 East Grace Street, Richmond: Closing on November 1
- 8215 West Broad Street, Richmond: Closing on October 28
- 3501 West Broad Street, Richmond: Closing in mid-September
- 2100 Ivy Rd, Charlottesville: Closing on November 1
Pennsylvania
- Airport Rd, Allentown: Date not specified
California
Closing in October:
- 116 Sunset Dr, San Ramon
- 1565 East Highland, San Bernardino
- 103 East Stetson Ave, Hemet
- 18 E. Carillo St, Santa Barbara
- 303 N. El Dorado St, Stockton
- 1071 El Camino Real, Redwood City
- 42420 Washington Ave, Bermuda Dunes
Why Is Wells Fargo Closing Locations?
There are plenty of reasons why Wells Fargo has decided to close down its locations. Let us have a look at them:
Wells Fargo Fake Account Scandal
The Wells Fargo fake account scandal happened in 2016 and had a major impact on customers. So what happened is that the bank created 3.5 million fake accounts of its customers, and the customers had no clue about the same. These fake accounts were created by bank employees who were pressured by the company to meet unrealistic targets.
Wells Fargo’s image was entirely built on ethics and integrity, but this scandal affected the customer’s trust deeply. So all this resulted in reduced revenue, a plummet in stock prices, a loss of reputation among investors, etc.
The company was also ordered to pay $3.7 billion in penalties, which affected its position even more so.
Changing Customer Preferences
Customers these days are using a wide range of digital capabilities, and the banking sector is no exception. Online banking has paved a new way for customers to carry out their banking operations with ease and much more convenience.
If a certain bank offers online services, and their customers can get the work done from anywhere online, then it is natural for them to switch.
Hence, as a part of a new strategy, Wells Fargo has decided to refine their branch footprint and has decided to invest in digital capabilities to align with the evolving customer’s needs.
Increasing Competition
As a part of the new strategy, Wells Fargo is also shuttering its other business that buys loans from third-party lenders. And has decided to shrink its mortgage-servicing portfolio.
The move comes as the company is facing extreme competition from online mortgage service platforms like Rocket Mortgage, LenderFi, etc.
Is Wells Fargo Going Out Of Business?
No, Wells Fargo is not going out of business. However, its reputation has been affected deeply because of its fake account scandal, a shift in online banking, etc.
As a result the company has closed down hundreds of its locations and is going to shut down some more at the end of 2023.
Having said that, Wells Fargo has decided to restructure to improve its image and to cater to changing customer needs.
As per Wells Fargo, the bank is altering its culture and procedures. They are also reviewing its management, risk, and control structures. The bank stated, “There is more work we must do to restore trust, and we are dedicated to undertaking that effort.”
What is the Future of Wells Fargo?
In the third quarter of this year, Wells Fargo made revenue of $20.9 billion, which was 6.5% higher than the revenue of $19.6 that was generated in the third quarter of 2022.
There was also a 3.1% rise in the share of the bank, which paints a positive picture for the company.
In an interview, the CEO of Wells, Charlie Scharf, stated, “Our revenue growth from a year ago included both higher net interest income and noninterest income as we benefited from higher rates and the investments we are making in our businesses.”
From this, we believe the many steps that the company is taking to polish its image and to cater to its changing needs are rendering fruitful.
Wrap Up
As a part of the many changes that Wells Fargo is working towards, it is also investing $100 million in minority homeownership and is placing more mortgage consultants in branches that are located in minority communities.
Not to mention, the company much like Huntington Bank and other competitors is closing down a few of its locations to minimize expenditure and to focus on online banking.
So the increasing revenue of Wells Fargo shows its strategies are working, and we hope it continues to do so.
FAQs
Where is Wells Fargo headquartered?
Wells Fargo is headquartered in San Francisco, with a number of hub offices across the United States.
How many Wells Fargo locations are there currently?
As of October 2023, there are 7017 Wells Fargo locations in the United States.
Who owns Wells Fargo?
Wells Fargo is a publicly traded company, and with 75.55% shares, institutional investors hold the majority of its ownership.