CNBC News Releases

CNBC Exclusive: CNBC Transcript: Wells Fargo CEO Tim Sloan Speaks with CNBC's Jim Cramer Today

WHEN: Today, Friday, January 25, 2019

WHERE: CNBC's "Mad Money w/ Jim Cramer"

The following is the unofficial transcript of a CNBC EXCLUSIVE interview with Wells Fargo CEO Tim Sloan and CNBC's Jim Cramer on CNBC's "Mad Money w/ Jim Cramer" (M-F 6PM – 7PM) today, Friday, January 25th. The following is a link to video from the interview on

All references must be sourced to CNBC.

JIM CRAMER: Okay, Tim, you became CEO in October of 2016. Of the bank, you vowed to turn it around. Where are we in the turn?

TIM SLOAN: We're-- we're making a lot of progress, Jim. By the way, thanks for having me on the show.

JIM CRAMER: Of course.

TIM SLOAN: It's good to see you. When I stepped in, Jim, I promised that we were going to look all across the-- company. Look for things that were broken, look under every rock, turn-- you know, open every drawer, and we've done that. We found some things, alright, but I also promised that if we found some things, we were gonna fix them. We were gonna make things right by customers. And we were gonna be very transparent about it. And we've done all that. In addition, and more importantly in terms of looking to the future, right, we've changed and upgraded our leadership team, both in terms of terrific leaders internal, as well as folks that we've attracted from outside the company, which have been terrific. We've reorganized the company. We used to be much more decentralized and we've centralized all of our enterprise control functions, risk functions, things like that. We've changed the way folks are compensated in the company, which we can talk about. And-- and then we've introduced a lot of new products and services. And so--


TIM SLOAN: --we're-- we've got more work to do, but we're on the right path.

JIM CRAMER: Okay, now, when I spoke to you after the quarter--


JIM CRAMER: --you said, "Listen, there's some pluses and minuses." Most CEOs always say it was the greatest quarter.


JIM CRAMER: And I know you want to play offense.


JIM CRAMER: Are you beginning to be able to play offense after having to play some defense because of the political environment? And also because I know you weren't happy with what happened previous to when you became CEO.

TIM SLOAN: Sure. So, we are playing offense. And I think the fourth quarter, which was not the greatest -- it was--it was a great quarter--

JIM CRAMER: You made a ton of money.

TIM SLOAN: Yeah, we made-- look we made $6.1 billion in the quarter, right. And when you look at our earnings per share for 2018, at $4.28, it was the highest earnings per share in 166 years, right. So, we're definitely playing offense. And how are we doing-- or how do you see that? You see that deposit growth up year over year, right, from a consumer standpoint. And you see that not-- not necessarily on the wholesale side, and also on a sequential basis, but you also see loan growth. Our loan growth in the fourth quarter was the strongest that we'd seen in two years, two years. And it was across the board. It was--

JIM CRAMER: It's not being hurt by this government shutdown, is it?

TIM SLOAN: No, it's not. It's not. It's too early to have an impact-- the government shutdown is too early to have an impact on the underlying business.

JIM CRAMER: And if you guys--

TIM SLOAN: But we-- but we've got to take care of these folks that are not getting paid, Jim.

JIM CRAMER: Okay, so let's talk about that--

TIM SLOAN: We've got to— we've got to do that.

JIM CRAMER: Can you do it? Yesterday on air--


JIM CRAMER: --Wilbur Ross, Commerce Secretary--


JIM CRAMER: --said, 'Back pay is in effect federally guaranteed.' Could you guarantee right here or pledge that since they are guaranteed, that you-- that your bank will make the loans to those people?

TIM SLOAN: So, here's what we're doing, Jim, alright. So we have 750,000 Wells Fargo customers that get a direct deposit from the federal government. So, what we did, effective the first Friday that-- that some of them were not getting paid-- and we're not trying to differentiate, you know, who's working, who's not, who's getting paid, who's not, right? We're just saying, if you-- if, as of November of last year, you had a direct deposit, which was the most recent information we had, we automatically started to waive overdraft fees. We then reached out to customers to say: 'Look, if you're-- if you're affected and you've got a loan from Wells Fargo, give us a call.' We now have 14,400 customers that are in the midst of discussion. What we're gonna do is we're gonna waive fees. We've done that. We're gonna extend payments, right, on all-- you know, whether it's a credit card, mortgage, you name it. That's what they're asking us for right now and that's what we're doing.

JIM CRAMER: Okay, so what's--

TIM SLOAN: All right, so that's where the focus is.

JIM CRAMER: All right, let's talk about Wells--


JIM CRAMER: --in terms of where it is--


JIM CRAMER: --in terms of the political firmament.


JIM CRAMER: $400 million, you're giving--


JIM CRAMER: --for community. Those of us who have been involved with Wells Fargo know that Wells Fargo is a very giving company.


JIM CRAMER: I have another life -- this is someone who's a member of the community. You have made efforts in the California wildfires, just today, to help. And yet when I look at the papers, there's a congressperson from California, Maxine Waters, who wants to have hearings about what the banks have done. Senator Warren, she has-- you have a target on you from Senator Warren. How do you reconcile some of these things you're doing, apparently, with what happened in the past and what the senators and some of the House want to do?

TIM SLOAN: Yeah, so really good question. First, thank you for acknowledging the fact that, I think one of the greatest things about our company is our commitment to communities and making a difference. We know we can't be successful without making a difference in communities. You mentioned-- the commitment that we announced today, $3.25 million to the Butte Strong organization, which is organizing the recovery of Paradise, California. Horrendous loss of life. Jim, we had team members that lost their homes that lived there. Lots of customers. We're going to make things happen there.

JIM CRAMER: Well, I think, you know--

TIM SLOAN: But in terms of the--

JIM CRAMER: --but Senator Warren would say: 'Listen, Tim, you were slow to see the harm you caused.' This is from the outside, when you did the outside director's investigation, 'slow to see the harm.' You gave an-- address in October 2016 where you said that we failed to see the problem for what it really was, something bigger than originally imagined. Elizabeth Warren is using that against you and saying that frankly you must be fired--


JIM CRAMER: --because of those statements and your lack of supervision. So, you may give the money and you may do the things the community wants. But here's a senator in the United States, who wants to run for president. Tim, she wants you gone.

TIM SLOAN: Well, that's-- she can have that opinion, Jim. I think I'm the right person to run this company today. And I believe that. One, because I care deeply about this company. I've been there for 31 years. I know how the company operates. I've taken responsibility. I don't think you should be criticized for taking responsibility, acknowledging mistakes you've made, which we've done, and then moving the company forward. Judge me on what I said we would do and what we've done.

JIM CRAMER: But what--

TIM SLOAN: And I think based on that, we're making progress.

JIM CRAMER: Okay, but here's a person who is a very persuasive person in a lot of ways, in terms of young people. She will run on—she will build on a stub. And one of the things on the stub, she wants Tim Sloan fired because he failed to supervise. Would it ever be to the point where Wells Fargo, the directors say, 'You know what, Tim? You're a liability and, and you've got to resign'?

TIM SLOAN: Look, I think if I'm not doing my job, as opposed to somebody having an opinion about me, right, that isn't always informed opinion, right?


TIM SLOAN: Then of course it would be appropriate that I'm not in this role, if I'm not getting things done. You know, I work-- I work for our shareholders and I work on behalf of the board, right? They have high expectations for me and I'm exceeding those expectations.

JIM CRAMER: I, look, as someone who follows stocks, frankly I'm shocked that you have a 10 PE. This is Wells Fargo.


JIM CRAMER: I'm shocked that you have more-- very high yield, maybe-- the highest of the major banks and--

TIM SLOAN: Well, with the dividend increase last week of 5%--

JIM CRAMER: Right. But do you think--

TIM SLOAN: --we're now at about a 3.6--

JIM CRAMER: But do you think it's this Federal Reserve consent decree that has a cap on what you're able to do? Because otherwise I don't get it. You've brought back-- you're almost gonna go back to the $3.3 billion you were before the crisis in terms of shares. So, is it the perception? Because how much business have you really lost because of the cross-sell investigation?

TIM SLOAN: You know, we haven't lost a lot of business. But there's no question that given the changes that we're making at the company and given some of the reputation issues that we've been dealing with, the rate of growth has slowed. I'll give you an example.


TIM SLOAN: So, if you look at primary checking account growth in our retail business, which is a measure for--

JIM CRAMER: Good judge. Good judge.

TIM SLOAN: --customers who say, "You're my bank," right? You get your direct deposit, lots of debit transactions and all the like. In the fourth quarter of 2016, primary checking account growth ground to a halt. It was 0%, okay. So, is that an indication that we're losing customers? No. But the growth stopped. So, now fast forward to December of last year, year-over-year growth was 0.7%, right? So, we're going in the right direction.


TIM SLOAN: Still not back to where we were before. And now, as of this-- the end of December, we're at 1.7%**. So, you're seeing progress. So, it has not a huge loss of customers. It's had an impact on our growth, but we're moving forward. And again, when you look at the fourth quarter in terms of deposit and loan growth, you see a lot of really, really good signs that we're making progress. We still have more work to do.

JIM CRAMER: Right. But I also saw the good long growth, as you mentioned. I am concerned about student debt. I know that—


JIM CRAMER: --Elizabeth Warren says you charge more than anybody else on that. I'm not sure if that's right. You're obviously a big mortgage lender. I'm concerned about housing and I'm concerned about the comments that Warren made about your highest fees. Where are we here?

TIM SLOAN: So again, let me make sure we're clear on a couple of issues. I think one, there was-- a report that came out by the C.F.P.B. that said that when you look at the student card that we provide, right, that our fees were higher than others.

JIM CRAMER: Well, 573 banks, they said that you were the highest--

TIM SLOAN: Right. What they didn't describe, right, was the functions and the services that we provide for those customers were broader than on average, right. Now, having said that, Jim, we're looking at the services we provide, looking at the prices, making sure that it's done correctly. We may make some changes--


TIM SLOAN: --because of that, right. But we're not over-charging anybody because it's not as if the prices that we're charging our customers-- I mean, most of this is free, right? It--


TIM SLOAN: They're ATM fees and overdraft fees. Let me mention something about overdraft. One of the big changes that we've made over the last few years has been innovation in the company. What are-- how can we use technology? How can we use information to provide and allow our customers to fulfill what our vision is, which is to satisfy our customers' financial needs and to help them succeed financially. So, in the second quarter of 2017, we came out with a new service called Real-Time Balance Alert. It's simple, right? You're a customer, you say, 'You know what, Tim? I'd like to know when my balance gets to be $100.' Why do you want to know that? Because you want to manage your finances better, prevent overdrafts, right? That's fair. So, we introduced that service. You know how often we are sending out real-time balance alerts on a monthly basis? The average last year, 43 million a month. Now, that's impacted overdraft revenue, right, including-- the overdraft rewind product that we introduced in November of--

JIM CRAMER: Well, are these allowing--

TIM SLOAN: --of the prior year.

JIM CRAMER: --you, again, I want-- I care about offense--

TIM SLOAN: Yeah. Yeah.

JIM CRAMER: --and I care about the state of the consumer.


JIM CRAMER: It sounds like to me the state of the consumer is actually much better.


JIM CRAMER: At Davos, they were all so negative. But I do not hear anything about recession.

TIM SLOAN: Yeah, I was in Las Vegas instead of Davos--

JIM CRAMER: Right. Well, there you go.

TIM SLOAN: Seeing-- seeing our team.

JIM CRAMER: Seeing-- alright.


JIM CRAMER: And then the second thing I sense is-- is that the Wells Fargo-- the politicians may be against it, but in terms of what we care about at Mad Money, we always care about ethics, obviously, and I know we were very--


JIM CRAMER: --tough on Mr. Stumpf, that the bank is kind of back.

TIM SLOAN: Well, we're-- we're-- absolutely in the right direction. There's no question about it. You can see it in our financial performance. You can see it in the turnover of our team. So, voluntary turnover, in the best job market that we've seen in our lifetimes, right, lowest unemployment, our voluntary turnover is down to its lowest level in six years. Our team members are saying, 'We love working at Wells Fargo.' Okay? Because we've made a lot of changes. If you have a team, a workforce, a team member base that's committed to what they do, right, you're gonna perform better.

JIM CRAMER: And that's—well, that's what I'm seeing happen. Anyway, I wanna thank Tim Sloan, President and CEO of Wells Fargo. This is Wells Fargo. Thank you so much, sir.

TIM SLOAN: Great. Thanks, Jim.

JIM CRAMER: Good to talk to you.

TIM SLOAN: Good seeing you. Appreciate it.

**Well Fargo has since reached out to clarify primary consumer checking customers of 23.9 million was up 1.2% from a year ago.

For more information contact:

Jennifer Dauble
t: 201.735.4721
m: 201.615.2787

Emma Martin
t: 201.735.4713
m: 551.275.6221