Could the Wells Fargo $3.7bn settlement have an impact on the bonus pool?
As we are approaching bonus szn I am curious to know if WF bankers should be concerned about the news regarding the $3.7bn settlement over irregularities in the auto loan business. The bank had the pay a 1.7bn fine plus over 2bn in compensation to clients.
This year WF is not down so bad compared to most BB, do you think this setback could affect the already damaged bonus pool even though this contingency was caused by the retail business line and was possibly partially provisioned?
…I’m sure that WF has a spare $4bn laying around??? Think about this question. The only way this doesn’t reverberate through all of it is if WF finds a new way to tap customer accounts for it otherwise everyone under the flag will bear some brunt.
I’d wager you do not work at a bank with a retail arm. You’d be surprised how separated the two BUs are. This won’t affect investment banking bonus pool and WF has obviously known this is coming.
Frankly, your wager is correct. I agree with the pt on the fact that it’s been known for a good time, not sure to what extent but $4bn seems tough to cough up no matter what. CS fell apart on $4bn but to your point - not the same situation. +1SB
wells isn't a bb
Most probably will not effect the bonus pool for 2 reasons:
- This is a legal settlement so it means the WF legal team must have been working on this for a while. The bank probably already self provisioned in the last quarters, so this shouldn't come as a surprise
- This sanction has nothing to do with the investment banking arm of WF, so probably it will impact other budgets and bonuses. WF has paid over 12bn in fines in the last decade, if this was paid using CIB bonus pools all the talent they have in IB would be gone long time ago
Also wells pays a shit ton of SBC for the senior bankers
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