00:00Mike, I want to start off first with some of the growth that we saw on the loan side.
00:04Total loan growth is up. Commercial loan growth is up.
00:07Deposits were also up as well, including larger deposits.
00:10And I'm wondering if you could maybe start on that larger side of the deposit equation
00:14with regards to some of those small and mid-side businesses.
00:20Yeah, hey, thanks, Romain, for having me again.
00:23And as you said, we saw really good momentum continue in the quarter across the loan space.
00:28And, you know, if you look at the credit card space, you know, you saw new accounts up 20 percent and balances up.
00:34You saw 19 percent increase in auto loans.
00:37You saw a good increase in the commercial bank.
00:40You saw, you know, increases across most categories in the corporate investment bank as well.
00:45And so you're just seeing really good, really good activity across the across the board.
00:50And that's that's coupled with like good activity on the consumer side.
00:54You continue to see good spending. We're not seeing credit issues emerge yet.
00:57So so we're overall a really good quarter.
01:00And we'll see if we'll see how that continues or if it continues into the early part of the year.
01:04How do you balance out the risk associated with that growth?
01:07I'm talking particularly about the 20 percent jump that we saw in the credit card business, 20 percent jump that we saw in the auto loan business.
01:14Are you comfortable right now with credit quality and the state of the consumer?
01:18Yeah, no, the consumer has been very consistent now for a number of quarters.
01:26I feel like we keep saying this, you know, quarter after quarter.
01:28But if you look at activity, it's really good.
01:31You look at liquidity, it's still strong.
01:32You look at, you know, credit performance still very strong.
01:35And you look at the growth that we're seeing, particularly in our credit card business.
01:39It's really a result of the new products that we've launched over the last three or four years.
01:44We're not expanding credit appetite, you know, substantially.
01:47So it's really good uptake in those in those new products.
01:50And then on the auto side, you know, very similar.
01:54You know, we've been investing in that business.
01:56We added on new partners like Volkswagen and Audi.
01:59And so you're seeing a really good growth there.
02:01And at this point, we're not seeing anything that would indicate that, you know, credits, that good credit trend is changing in any significant way.
02:09Mike, you bring up those credit cards.
02:11And there's been a chorus of your contemporaries talking about what the president proposed a few days ago, that cap on credit card interest rates.
02:17And I'm curious how you're thinking through that, if that were to come to fruition.
02:20And maybe you could give us some insight to what efforts are underway to kind of communicate your perspective to policymakers in Washington as a result of that proposal.
02:30Yeah, look, I think, you know, as you as you think just broadly about the issue of affordability and, you know, what people are talking about, you know, there's certainly, you know, we share some of those concerns.
02:39And we've been, you know, indicating that, you know, there's been, you know, people have been, you know, dealing with that for, you know, quite some time.
02:45But when you look at this, this idea, you know, it will it will remove credit at a really important time from the people that most need it.
02:53And so there will be negative consequences across, you know, of credit availability across the spectrum of of credit card users.
03:02And so as we sort of think about different solutions on how to deal with the affordability issues, we just really need to make sure there's no unintended consequences.
03:09And in this case, I think, you know, there will be negative consequences, not just in credibility, credit availability, but also just, you know, broader economic growth.
03:18And so we'll see how it goes. But again, I think that's very consistent with you here from, you know, the rest of the folks, you know, commenting on it.
03:26I'm very curious. It seems like there's been kind of this disconnect between with the way that markets have been reacting to policy changes that the president has made.
03:32And I'm curious, as you talk to Wells clients, sort of what they say about how they understand what the president's doing, sort of what what gives the majita and what doesn't, how good are they at this point in the president's second term,
03:43kind of figuring out sort of what's real and what isn't and sort of what is an impact on their businesses?
03:47Yeah, well, you know, I think broadly people and clients and across different, you know, whether it's, you know, middle market, small business, large corporates, you know, uncertainty definitely creates questions for them in terms of, you know, where's the economy going?
04:04How are people going to react to it? How do I adjust my business model to sort of new policies?
04:08And I think you've definitely seen, you know, that, you know, certainly since, you know, since April on a number of different issues.
04:15But I think, you know, to some degree, I think people appreciate the fact that the administration is trying to deal with some pretty tough issues and but are still trying to digest a lot of what's happening.
04:27And I think that's why you see, you know, even in the in the commercial banking business, in that core middle market client, you know, we still haven't seen, you know, big, big changes in utilization of their credit facilities.
04:38Because I think people are still being very cautious and very prudent about making making big investments because they want to see, you know, how how the economy develops and how sort of policy develops over a slightly longer time period.
04:49Mike, can you talk a little bit more about some of the expansion of Wells Fargo's business, particularly since the regulatory cap was lifted?
04:57There's been a lot of talk about Charlie Sharf, the CEO's deeper push into the investment banking and capital market side of that business.
05:05I know we did not see any real material improvement in those results for the most recent quarter.
05:10But what should investors expect going forward as to how much of a share of business investment banking and the like will make up of your revenue going forward?
05:20Yeah, well, you know, I think you need to take one step back and think about, like, the growth strategy that we put in place.
05:26And it really started, you know, four or five years ago, six years ago, in some in some cases remain.
05:31And it started with, you know, really focusing the company on what we thought were the most important businesses, products, capabilities, people.
05:38That was one part, you know, and that's all the investments we've been making and people and technology and all of the things we've talked about over the over the years.
05:46It also, you know, started with, you know, the efficiency work that we've done.
05:50You know, we've saved 15 billion dollars over the last five years.
05:52We have reinvested a lot of that back into the business.
05:56So the growth story started, you know, years ago.
05:59And now when you fast forward there where we've got, you know, additional flexibility now that the asset cap is gone, it's just, you know, making sure that we continue to just go after that opportunity quarter after quarter after quarter after quarter.
06:11And I think what you've seen is, you know, in the investment banking business, fees are up 12 percent year on year.
06:16We saw a little bit of growth in market share this year on the full year basis.
06:19As you look across the business, you know, more broadly, credit card applications are up 20 percent, you know, auto loans 19 and, you know, all the things we sort of talked about today.
06:27And so you're starting to see a lot of that, those growth drivers start to come into into into the picture now that, you know, we have more flexibility just to be more proactive to go after that opportunity, not just in the investment bank or the markets business, but just really broadly across the whole company.
06:43And that's what makes us really excited about the coming years is like that opportunity is right in front of us.
06:47It's clear. We, you know, it's just about executing, you know, every day and every quarter, you know, across the different businesses.
06:55I've only got about 30 seconds left, Mike, but I do want to circle back to where we started with the lending side of the business net interest income.
07:01What's the house view right now for you and your team with regards to interest rates and whether they are going to be a potential tailwind for you and net interest income?
07:09Well, I think, you know, if you look at what's priced into the market today, you know, there's a little over two cuts priced in for this year.
07:20It's likely some at least some of that will happen. It feels like, you know, certainly the first couple of cuts seem like more more certain than than maybe the, you know, from there.
07:30And then I think the big question is what happens overall with the 10 year treasury and other, you know, the rest of the curve and how that moves.
07:37And I think our assumptions right now embedded in our in our expectations that we set that it'll be pretty in a pretty tight range and pretty stable from where at the level it is today for the rest of the year.
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