For the President of the US, impeachment proceedings have begun, and one aspect it shows is who is President matters. The President tends to go over the line on multiple occasions and not remember the rules or laws. The closest example in the banking is Wells Fargo. A former CEO wanted every customer have 12 products and if you think about the number of products you have with your bank, it is likely less. In order to meet this 12 standard, fake accounts and products were set up for millions of customers. The bank CEO was fired.

In an article by Imani Moise of Reuters, for the years 2016 to 2018, Wells Fargo was the only bank among the top 4 not to have growth in loans or deposits. Think about that statement, according to President Trump the US economy has been the best performing in the world and one of the top 4 banks in size does not have growth in loans or taking in deposits. The existing CEO Allen Parker will return to being the general counsel while Charles Scharf will take his place. Mr. Scharf is the former CEO of New York Mellon and Visa Inc.

The expectation is Mr. Scharf will benefit from Mr. Parker’s work in changing the culture at the bank. The new CEO is expected to change the reputation and bring more business to the bank and the shares to move forward.

Linking to dividend paying stocks, the bank has been paying a dividend for the past number of years but the stock price has remain constant. Whenever there is a scandal with one of your investments, unless you love the shares, reduce your holdings and find alternatives as the change in culture happens. You can always buy back in a couple of years if you want to own the shares.

There are more questions than answers, till the next time – to raising questions.