Wells Fargo & Co. Chief Executive Officer Tim Sloan said the banking giant is ready to increase lending for car sales after pulling back last year, and it's now looking with consternation at the commercial real estate market.
In auto lending, "we've pulled back enough and now we're going to be growing that business again," Sloan said Monday in an interview with Erik Schatzker on Bloomberg Television. Yet, "there are some markets that we're a little bit concerned about."
Some transactions in commercial real estate seem "frothy," he said, without giving examples. The San Francisco-based firm still likes that business, he noted.
Wells Fargo decided to rein in car financing in mid-2017 and tighten underwriting standards. The decision came as a drop in vehicle resale prices made it harder for lenders to blunt losses by repossessing cars when borrowers default.
The bank previously signaled it could resume growth in that business some time later this year. In February, Wells Fargo said it aimed to complete consolidation of its regional car-loan centers by April, and that lending would then increase within two quarters.
In the wide-ranging interview, Sloan also discussed the bank's campaign to rebuild customer trust after a series of scandals.
In April, Wells Fargo & Co. agreed to pay a $1 billion fine imposed by two U.S. regulators for auto lending and mortgage abuses, government officials announced.
Regulators probed Wells Fargo for months after it acknowledged charging thousands of borrowers for auto insurance they didn’t need, driving some to default on their auto loans and lose their vehicles through repossession.
The company's culture is "fundamentally fine," Sloan said in the Bloomberg interview, and its efforts now mostly focus on improving processes and internal systems. This month, Wells Fargo launched an ad campaign called "Re-Established," reassuring the public that it's addressing problems and making things right.
"It's being honest about saying, 'Look, we've made some mistakes, there's no question about that,'" Sloan said. "We've taken responsibility. We're not perfect, but we're going to move forward."