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NEW YORK: Wells Fargo could see its headcount decline further as it aims to improve efficiency, Chief Financial Officer Mike Santomassimo said on Tuesday.

The bank has been trimming its workforce since the third quarter of 2020. It has already reduced its employee base by nearly 40,000 and cuts are likely to continue, Santomassimo said.

“I do think that there’s more to do, and you’ll see that through the headcount number,” he added.

Wells Fargo had 233,834 employees at the end of the June quarter compared to 243,674 in the second quarter last year.

The bank has trimmed its mortgage business, which has also seen some layoffs.

The industry is also seeing pressure in the commercial real estate business and particularly in office loans, which has emerged as a big worry for banks as financing costs rise for many buildings that have been largely vacated by employees who opt to work remotely.

Even though there is systematic stress in office real estate, the other portfolios are performing well, Santomassimo said. There could be some ongoing pressure in the CRE portfolio but it is unlikely to be to the tune of what the bank had seen in the previous quarters.

In the June quarter, Wells Fargo increased its allowances for credit losses by $949 million to account for potential losses in office loans.

Wells Fargo is still operating under an asset cap that prevents it from growing until regulators deem that it has fixed problems from a fake accounts scandal. The company still has nine open consent orders from banking regulators who require additional oversight of its practices.

Santomassimo did not provide any guidance on when the asset cap could be lifted but said the bank has been working to fix its internal issues.

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