Asks about Wells Fargo's net interest income/margin outlook beyond Q2 given stock decline.
speaker1
Mike Santomassimo
Corrects: NII should be up in Q2, not down. Highlights strong momentum across businesses: auto originations +60%, card originations +50%, new checking accounts +15%, markets revenue +19%, banking revenue +11%. Loan growth and deposit growth positive. Overall performance as expected.
Asks where balance sheet growth will come from post-asset cap lift: trading, commercial lending, or consumer balances.
speaker1
Mike Santomassimo
Growth expected across all businesses: card/auto balances, stable mortgage, consumer deposits, markets business, investment banking traction, commercial bank loan/deposit growth, wealth management.
Asks about stress scenario for $36B private credit portfolio and underwriting protections.
speaker3
Mike Santomassimo
Portfolio has conservative ~60% advance rates, allowing ~40% cumulative loss buffer. Has diversification limits, structural enhancements, underwrites underlying loans. Long-term credit performance strong, comfortable with portfolio.
Asks if sticky inflation/delayed Fed cuts affect return targets and what needs to improve.
speaker3
Mike Santomassimo
Confident in path to 17-18% returns, not reliant on one thing. Benefits from multi-year investments in card, corporate investment bank, commercial bank, wealth management, and consumer businesses maturing.
Asks about impact of higher oil prices on consumer spending patterns and potential spillover to commercial lending.
References 'stickier inflation' context and Fed implications.
speaker1
Mike Santomassimo
Consumer spending resilient, up YoY weekly. Gas spending increased since March conflict but is ~3% of aggregate spend (~6-7% for lower wage). Good credit performance, delinquencies better than modeled. If oil stays high for very long, may have impact, but hard to predict. Low unemployment helps manage for some period.