Thirteen days into his tenure as CEO, Tim Sloan is already apologizing to his employees.
Of course, it’s for something that didn’t happen on his watch as CEO, though Sloan is a long time Wells Fargo top executive. The apology was for the account scandal that has already cost the bank $185 million in fines, and could by one estimate cost Wells Fargo as much as $8 billion in lost business.
Sloan acknowledged that not only were customers hurt by the 2 million phony deposit and credit card accounts opened without their knowledge—so were the the Wells Fargo (WFC) employees.
“I want to apologize to all of you,” he said in a prepared statement before an audience of Wells Fargo employees at the Knight Theater in Charlotte late Tuesday. “I want to say we’re sorry for the pain you have experienced as team members as a result of our company’s failures.”
The bank will also hire outside culture experts to “help us understand where we have cultural weaknesses that need to be strengthened and fixed,” the prepared remarks stated.
In September, several regulatory agencies together fined Wells Fargo $185 million for opening the unauthorized accounts between 2011 and 2015. According to the Consumer Financial Protection Bureau, employees were incentivized to do so through high sales targets. Former employees later came forward to say Wells Fargo supervisors pressured workers to open unnecessary accounts—often for fear of being written up or fired.
Sloan, along side his other executive leaders, will be making town hall style appearances with team members across the country, bank spokesperson Mark Folk said.
That comes after former CEO John Stumpf retired on Oct. 12. Stumpf’s apologies to consumers failed to quell public outrage over the scandal, especially after the executive initially blamed a few bad apples, some 5,300 employees, for the fraud. Sen. Elizabeth Warren (D-Mass.), one of Wall Street’s most vehement critics, has also focused on a divide between Wells Fargo and its employees. While employees lost their jobs because of the scandal, she pointed out at a Sept. 20 Senate hearing, executives, at least at first, still held on to their positions and pay. Stumpf forfeited some $41 million in unvested stock after the Senate hearing.
Now Sloan has rehabilitating the bank’s image at the top of his list of priorities. Shares of Wells Fargo, once the largest U.S. bank by market cap, have fallen 8.6% since the CFPB fined the bank in early September.
The bank stands to lose significant business if it can’t regain consumer trust. A recent study from consultancy firm cg42 also found that 14% of Wells Fargo customers with individual accounts have already decided to look elsewhere—meaning the bank could lose as much as $8 billion in revenue over the next 12 to 18 months. That’s a significant portion of Wells Fargo’s revenue—a 9% drop off from its fiscal year 2015.
The troubled banking giant also unveiled a 30 second advertisement Monday that listed how the bank was hoping to fix the fallout. That includes eliminating the sales goals in question, and fully refunding those impacted.