Wells Fargo’s New Chief Promises Cost Cuts
Wells Fargo’s new CEO Charles Scharf set aside an additional $1.5Bn for legal costs following the announcement that its stock had fallen 55%. The legal costs are related to the bank’s recent sales scandal. Scharf also promised ‘fundamental changes’ to the bank. In the final quarter of 2019, Wells Fargo lost nearly $2Bn.
In the past, Wells Fargo has relied on cost cuts whenever its growth was sluggish. However, a large amount of fines and costs relating to a scandal first uncovered in 2016 has damaged its bottom line. “There is no reason why we shouldn’t have best-in-class efficiency with these businesses at this scale, and that ultimately will be our goal,” Scharf said in a business call.
Flybe Reaches Rescue Deal With UK Government
British airline Flybe reached a recovery deal with the UK government. Ministers have agreed to work with the firm to create a repayment plan for its significant tax debt. In addition, the airline’s owners agreed to pump more money into the floundering business.
“Flybe plays a critical and unique role in the UK aviation system, supporting the development of the regions, providing essential connectivity to businesses and stimulating the growth in trade,” the boss of the Airport Operators Association, Karen Dee, said in a statement.
China To Increase US Imports Under Trade Deal
China pledged to buy more than $80Bn in US-manufactured goods over the next two years. This comes as part of the trade war truce, ending an almost 2-year feud between the two countries. However, some trade experts remain skeptical, saying that it is an unrealistic target. In addition to imports, China will buy $50Bn more in energy supplies. Overall, China expects to spend nearly $300Bn over the next two years.
In response, the US suspended tariffs that were about to take effect and halved others. Even still, US tariffs remain on nearly $360Bn worth of Chinese goods, two-thirds of the original amount. The current Phase One deal does not include the US removing any other tariffs.
Dominic Chappell Ordered To Pay $12.3M
British businessman Dominic Chappell was ordered to pay £9.5M ($12.3M) into the BHS pension scheme after losing an appeal. Chappell bought the firm in 2016 and failed to give pension information to his employees. However, after its closure later that year, 11,000 people lost their jobs.
Codelco Uncovered $22M Insurance Fraud
Chilean Codelco, the world’s largest copper producer, filed a lawsuit over an alleged scam in insurance contracts drawn up by union workers. The firm said that inflated premiums for life and personal accident insurance had cost $22 million. “We are ready to support prosecutors in every way we can to ensure this investigation reaches the appropriate conclusion,” it said in a statement
