Wells Fargo retains $50B 2026 net interest income outlook as Basel proposal implies ~7% RWA decline

What we drew from this source

The claims Via News extracted from this document. We point to the source; we don't replace it.

• Wells Fargo's outlook assumed 2-3 cuts by the Federal Reserve, but the market currently expects fewer cuts

  60% confidence

• Wells Fargo's CET1 ratio of 10.3% is within stated 10% to 10.5% target range

  60% confidence

• Noninterest expense increased $439 million, or 3% from a year ago and included approximately $700 million of seasonally higher expenses

  60% confidence

• Noninterest income increased $696 million, or 8% from a year ago

  60% confidence

• Peak unemployment rate in reserve scenarios went up to a little over 6%, 6.1% to be exact, with significant downside weighting unchanged

  60% confidence

• Expectation of approximately $2 billion in 2026 seems appropriate

  60% confidence

• Rates are driving NII pressure and Wells Fargo is not competing on price to grow the balance sheet

  60% confidence

• Wells Fargo saw diluted earnings per share increase 15%, revenue increase 6%, loans grow 11% and deposits up 7% compared to a year ago

  60% confidence

• There's no magic to 10% to 10.5% in the future if capital requirements change

  60% confidence

• Wells Fargo is not reacting today to concerns about NBFI lending and disclosures aim to ensure investors feel as good about what they're doing as management does

  60% confidence

• Wells Fargo is still going to stick with the 10%-10.5% CET1 target

  60% confidence

• Card growth is about awareness and advertising

  60% confidence

• Period-end loan balances grew 11% from a year ago and exceeded $1 trillion for the first time since Q1 2020

  60% confidence

• Under the proposed Basel capital rules, Wells Fargo's risk-weighted assets could decrease by approximately 7%

  60% confidence

• Expects additional margin compression next quarter

  60% confidence

• Wells Fargo's net loan charge-off ratio was stable from a year ago and commercial losses included a single fraud-related loss believed to be an isolated incident

  60% confidence

• Net interest income increased $601 million, or 5% from a year ago, and decreased $235 million, or 2% from Q4

  60% confidence

• There is absolutely nothing that has changed regarding ROTCE targets

  60% confidence

• Under Basel proposal, operational risk will increase but there's a big decline on credit risk with benefits for investment-grade credits and mortgage portfolio, leading to about 7% decline overall in RWA

  60% confidence

• Three things drove NIM compression: markets balance-sheet mix, interest-bearing deposit mix, and rates coming off the back of Q4

  60% confidence

• Debt markets are wide open and IPOs may return if volatility stabilizes

  60% confidence

• Wells Fargo is focused on organic growth and not spending time on M&A

  60% confidence

• Wells Fargo's expense guidance is unchanged and pressure would mainly be revenue-related compensation

  60% confidence

• At the end of Q1, financials except bank loans totaled approximately $210 billion, or 21% of total loan portfolio

  60% confidence

• Wells Fargo is retaining guidance of $50 billion, plus or minus, of net interest income for 2026

  60% confidence

• Wells Fargo is actually really confident in the path to 17%-18% ROTCE

  60% confidence

• Wells Fargo still expects 2026 noninterest expense to be approximately $55.7 billion

  60% confidence

• Wells Fargo returned $5.4 billion to shareholders in Q1, including $4 billion in common stock repurchases, while continuing to operate with significant excess capital

  60% confidence

• Markets balance-sheet growth shouldn't be dilutive to ROTCE, and Wells Fargo will either get increased flows at strong ROTCE or won't use the balance sheet for it

  60% confidence

• Card account growth is driven by really good, compelling, simple products

  60% confidence

Data points we hold from this source