Wells Fargo to sells all branches in Midwestern states
The scandal-plagued Wells Fargo bank has announced plans to sell all of its branches in US Midwest, putting an end to its retail presence there.
Wells Fargo, the second-largest bank in the United States, declared on Tuesday that it would sell 52 retail branches in the Midwest to Flagstar Bank, ending its physical presence in Indiana, Michigan and Ohio, and a few locations in Wisconsin.
The sale is reported to include 33 branches in Indiana, 14 in Michigan and Wells Fargo's only branch in Ohio, plus the four in Wisconsin. Wells Fargo will still have 48 branches in Wisconsin.
The 52 branches covered roughly 490 employees managing 2.3 billion dollars in deposits and assets.
Mary Mack, Wells Fargo’s head of community banking, said the bank will be “working closely with Flagstar over the coming months to ensure a smooth transition and uninterrupted service.”
“We remain committed to these communities, and Wells Fargo will continue to have a presence in the area with other businesses including commercial lending, wealth management, retail brokerage, and home lending,” he added.
The San Francisco-based Wells Fargo said the sale was part of a previously announced plan to close 5,000 branches by 2020 and should be completed by the end of this year.
The announcement comes as the bank faces severe sanctions and ongoing probes from federal and state officials over a fake-accounts scandal.
In January, the Federal Reserve hit Wells Fargo with unprecedented sanctions after the bank opened and charged customers fees on millions of consumer accounts without their consent.
The Fed, which is also seeking the ouster of Wells Fargo board members, prevented the bank from growing beyond two billion dollars in assets until it showed it had cleaned up its act.
The Federal Reserve announced it could maintain the sanctions until the year 2019.
A Wells Fargo spokesperson claimed that the sale of branches in the Midwest had "no connection" to the sanctions.
Flagstar Bank, which is to buy all the 52 branches in the US Midwest from Wells Fargo, is currently based in Michigan and holds 17 billion dollars in assets across nearly 100 branches in Michigan with eight more in California.
After the deal between the two sides is completed, the branches will be rebranded as Flagstar locations.
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