Finance

Wells Fargo 'worst crisis management' I've seen in 30 years: Top bank analyst

Mike Mayo: New chapter for Wells Fargo
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Mike Mayo: New chapter for Wells Fargo

The departure of John Stumpf as chairman and CEO of Wells Fargo gives the embattled bank the chance to turn the page on the secret account scandal, banking analyst Mike Mayo of CLSA told CNBC on Thursday.

Mayo said new CEO Tim Sloan, elevated late Wednesday from president and COO, has the opportunity to really compensate defrauded customers.

"Here's my solution, or one of many solutions: ... Sloan stands up there and says, 'Listen, we're going to make 1 million phone calls to every affected customer,'" Mayo said on "Squawk Box."

The bank should pay those 1 million customers $1,000 each, Mayo added. Such a move would add up to $100 million, which would match the amount Wells Fargo paid to the Consumer Financial Protection Bureau as part of a $185 million settlement of charges that bank employees opened fee-generating accounts for unsuspecting customers.

The Office of the Comptroller of the Currency received $35 million, while the city of Los Angeles got $50 million. Under last month's settlement, only $5 million was allocated for victimized customers.

"This is the worst crisis management I've seen in my three decades of following the banking industry. This is ridiculous," Mayo said, arguing the bank "struck out looking" in its handling of the mess, which also resulted in two contentious hearings on Capitol Hill.

The bank analyst did applaud the clawbacks of some of Stumpf's compensation and that of the former head of the community banking unit where the sales practices in question were conducted.

In addition to Stumpf's retirement and Sloan's promotion, lead director Stephen Sanger becomes the board's nonexecutive chairman.

Wells Fargo shares were slightly lower in early Thursday trading. Since the scandal broke, Wells Fargo stock has fallen about 9 percent, based on Wednesday's close.

The bank is set to report its latest quarterly earnings on Friday.