Wells Fargo’s (WFC) 3Q17

Tim Sloan – President and Chief Executive Officer

The scandal continues to have an impact

“There is a little bit of impact on some municipalities they have put us on probation or just said they are not going to use as much for a period of time. Though we had some municipalities that have taken us off that because we’ve executed on everything we said we are going to execute over the last year….I can’t commit to you Matt that we’ve finished everything because things are still in progress but we are very far along but I think it’s also important to reinforce — our review of all of our policies, procedures, practices is going to continue for a long time meaning that we got to continue to ask more of ourselves everyday”

John Shrewsberry – Chief Financial Officer

On rates

“…the benefit from higher rates increased average loan yields 5 basis points in the quarter, the seventh consecutive quarter of increasing loan yields…We’ve not made material changes in rates paid on consumer and small business banking deposits within our retail bank with the majority of our peers also holding these rates steady. We have implemented some incremental deposits repricing for commercial and wealth and investment management customers as market rates have increased.”

Bank of America’s (BAC) Q3 2017

Brian Moynihan – Chairman and Chief Executive Officer

Moderate economic growth projected

“We expect moderate economic growth to continue this year and we expect the US to grow a little faster next year above 2% and outside of US is growing in the mid-3s.”

Consumers are spending

“in our consumer payments we are seeing consumer activity pickup. Consumers are spending, whether it is checks written, cash taken out of the ATM’s, P2P payments, and all the debit and credit cards, 5% more through the first nine months of 2017 than they did in the first nine months of 2016. That’s up faster growth rate than it has been in prior years.”

Optimism persists

“Our commercial clients continue to perform well. They continue to remain optimistic. They continue to look forward to continue implementation of a pro-growth agenda, particularly focused on meaningful tax reform. Housing starts home prices continue to remain on positive trends. Employment is strong and employers continue to search for skilled workers. So that leads to a solid atmosphere and we see no near-term indications of any change to it.”

Paul Donofrio – Chief Financial Officer

A rate hike would be beneficial

“If we get a late 4Q hike, as expected by the market, this should mostly benefit NII in Q1 2018. With respect to asset sensitivity as of 930 [ph] an instantaneous 100 basis point parallel increase in rates is estimated to increase NII by 3.2 billion over the subsequent 12 months. This is largely unchanged from June 30 and continues to be predominantly driven by our sensitivity to short-end rates.”

Suntrust at Barclays Notes

Aleem Gillani – Chief Financial Officer

Rates moving up is a double edged sword

“Thank you. Well, one of those indicators actually is higher rates. As rates move up naturally, it will start to put some people or companies under stress. So higher rates is a little bit of a double-edged sword. It’s clearly going to benefit us, given the fact that we are asset sensitive and we will benefit from higher rates. But that’s an indicator that we’re watching from – we’re watching for.”

Some indicators that would usually point to the cycle turning have been false positives

“Some of the other indicators that we’re looking at actually look like they maybe giving false positives in a couple of instances. We’ve been certainly watching the auto market. We’ve been watching the CRE markets and looking for areas of overbuilding or overheating there. And that has caused us in a couple of instances to be more cautious in certain areas. And again, perversely from the double-edged sword perspective, the effect of both Harvey and Irma may help in all those markets.”

Societe Generale’s (SCGLF) Q2 2017 Earnings Call Notes

Frederic Oudea – CEO and Director

Positive outlook on Europe

“our economists are reasonably positive on the next 12 to 18 months’ economic outlook. And may I say in particular, in Europe, you have seen the Q2 figures and provided that there is not any extraordinary event, I would say, the economy should carry on doing pretty well on the back of a high level of confidence with more clarity on the political side, et cetera.”

Philippe Heim – Group CFO

General outlook for Europe and Africa

“I have to mention that the economic environment remains broadly the same all across the board in the various places where we operate. We’re still benefiting from a strong momentum across the board in Central and Eastern Europe, with – let’s say, a solid GDP growth supported by strong domestic demand….And in Africa, we’re still – we still see a strong growth in the places where we operate in – and specifically in Sub-Saharan Africa with Congo and Ivory Coast and, again, in Cameron, while the situation is more mixed in North Africa.”

In sum

“So in a nutshell, the quarter was marked by lower activity, a wait and see attitude coming from investors and hence, we’re seeing our revenues down by 4.3%.”

Equity revenues up, Fixed income down

“So in equity, revenues, they’re up slightly by 3.3%, a strong performance of structured products, with highest revenue since first half of 2015, while, of course, with lower activity all the flow products businesses’ were affected. In fixed income, pretty much the same pattern. Revenues were down by 6.8%.”

Morgan Stanley’s (MS) Q2 2017 Earnings Call Notes

James Gorman – Chairman and Chief Executive Officer

Changes in regulations would boost growth

“now is the time to make some practical changes for the multitude of regulations. These changes would allow U.S. banks to be greater engines of economic growth…Let’s focus on some sensible changes, because we’ve now had eight years of experience and digest and see what worked and what didn’t. And the cumulative effect of a lot of these regulations in some cases end up if you will with a double counting”

Rate hikes will be beneficial

“as the major U.S. depository we have endured historically low interest rates for a very long time. Each move when hiring rates assuming a measured path should benefit our business.”

Human advisors are not that much more expensive than robo platforms. 

“If you look at the average basis points paid from the various robo platforms, they range in general like things from something like 20 to 40 basis points. If you look at the average basis points for a full service advisory like us, just divide our revenue into our assets including everything, you get somewhere in the 70s, low 70 basis points. So the value added of the financial buys and the institutions behind it and the research, the product offering, the new issued calendar you could argue is being putout there for 30 to 40 basis points. It’s not clear to me that, that is such an expensive gap that that’s going to lead to the cannibalization issues.”

Bank of the Ozarks 2Q17 Earnings Call Notes

George Gleason

Construction is likely to pullback a bit

“We do have the expectation that construction nationally across all product types and all markets across country is likely to pullback a little bit and whether that number is 10% or 20% I don’t know, but in talking with our customers as RESG guys do and they are passing that feedback along to me, cost of labor and materials in some markets are going up significantly. Cost of construction financing is going up. Cost of feds moved interest rates now four times and probably spreads on construction financing at least in our experience have gone up over the last 18 months to 2 years. So, it’s costing more in labor materials and capitalized construction period interest for our customers to build things and we are working against a period of years coming out of the great recession, where supply did not keep pace with demand and supply of product and lot of product types is caught up with demand now and lot of submarkets. So, there are lot of markets around the country where you might have had 5 projects coming to market a year ago, but there is really only a need for two more projects coming to market this year and that is slowing the volume to some extent.”

We wish we could invest more in securities but we can’t

“We are not – our securities portfolio right now is at a very low percentage of earning assets compared to where we were say 7 years ago or 10 years ago and we would like to be in an environment where that securities portfolio could become a much higher percentage of our earning assets. We are unfortunately not in an environment today where we feel like we can add a lot of securities for yield purpose as we did add securities last year that we retained a lot of the kind of short and medium-term mortgage-backed securities and other short-term securities from the CSB acquisition for liquidity. And then we added securities as we have talked about at length on this call in the last quarter for liquidity. So, we are keeping the liquidity element of our securities portfolio where we feel like it needs to be. But as far as really investing a much higher percentage of our earning assets and securities because we love the risk reward profile from an interest rate risk we think – we are a long way from that at this point.”

CNBC Interview with UBS CEO Sergio Ermotti

http://www.cnbc.com/2017/07/10/cnbc-interview-with-sergio-ermotti-ceo-ubs.html

There are still weak players in Europe

“It is clear that Europe is not one pot in which all banks are behaving the same way. There are winners and there are very strong players in Europe and there are still weak players that should be allowed to restructure or to be consolidated.”

They desire normalization of rates

“The sector…would welcome a little bit of normalization on the rates side in Europe. It is clear to me that we’ll see what’s going on in the U.S.. If the U.S. hikes more than once or two times it is going to be very difficult for the ECB to stay on hold for too long. I think that you don’t want to create too much of an interest rate gap between the between the euro and the dollar.”

Negative rates have not been passed to retail investors

“to pass the cost of negative rates to the borrowers it’s, you know, it’s a counter-intuitive measure in any case and it’s going to be very hard. I think that at this stage we are limiting and we basically are not passing the cost of negative rates to so-called retail investors. But we have been passing more and more the cost of negative rates to wealthy individuals or family offices and corporate clients.”

Need for change in policies to boost business

“I do see a little bit of a stagnation of business, and a little bit of volatility and change in policies may help to give a little bit of momentum to the business.”

People are investing cautiously 

“if I look at the cash balances as a percentage of wealth we manage, they have been coming down from the high-20s to around the mid-20s. So this is clearly a sign that people are willing to invest more, but still very cautious. You know 26/27 percent cash balances is still almost twice as high as we had five years ago.”

 

Citigroup at Morgan Stanley Conference Notes

John Gerspach CFO

Slow trading environment

“I guess I will call it a slower trading environment, we would expect revenues in our fixed income and equity markets to be down year-over-year in the, I guess I’d call it the low double-digit range maybe 12% to 13%. Yes. And so that would mean that we were down 12% to 13% this year. Of course, that also means we would be down sequentially and maybe just a little bit more than we otherwise would have anticipated given the environment. I’d also say though at the top of the house for the overall firm, expenses should also be down sequentially, probably not enough to completely offset the seasonality in revenues. So, you might see our efficiency ratio pop up to 59% this quarter. But again, it should decline in the second half of the year and then we are still very, very comfortable with our target of 58% for the full year.”

I don’t think the Fed is really going to impact our LCR

“I don’t think the Fed shrinking the balance sheet is really going to impact our LCR. When we look at the constraining factors on LCR right now, it’s really more driven by resolution requirements as we need to preposition liquidity throughout the firm in order to make sure that we have got a very good resolution plan”

JP Morgan at Morgan Stanley Conference Notes

Gordon Smith – Chief Executive Officer of Consumer & Community Banking

Extending into lower prime areas because economy/employment look good

“Yes we have extended slightly into that lower prime, if you like segment, certainly not into sub-prime, but we have extended slightly our credit box. In about 2013 2014, everything that we read in the numbers we feel comfortable that we will get paid for taking that extra risk. We are going to sub-prime lending, but we are seeing growth actually across all segments and I think it is actually quite encouraging when we look at the economy, I am sure we will talk about that a little bit later on, but the employment situation looks strong, small business looks strong, and actually slightly improving I would say, slightly improving. So generally speaking, despite perhaps what you might read in some publications or the perspective that some people might take away from the media, I think the economy actually looks very good and we’re seeing that growth as I say across all the credit range. ”

Amazon is really an amazing company

” The Amazon relationship is a terrific one, a really terrific one. It is an amazing company. The way that they have thought about the business in every segment that they play in, they really understand the use of data, as we do, so it is a terrific partnership, it is in the co-brand product, it truly is a general-purpose plastic product, and we do see meaningful use of Amazon on that product. So that is in private label.”

Definitely not the time to be loosening standards in auto loans

“So, Jimmy I will go back to the way I described. I wouldn’t say that this is a moment of tightening and this is a moment of weakening – of loosening that’s something we are constantly watching. As I say, vintage by vintage. It is not in my opinion a time to be loosening your credit standards, no questions. I think the industry is at a point where it should be rigorously managing credit and so – and I hesitate a little bit because it sounds very binary between those choices and as I say it’s done well, it’s about being much more surgical than that, and to some degree honestly there is instincts involved.”

Bank of America at Morgan Stanley Conference

Tom Montag – Chief Operating Officer

More uncertainty in the world than there’s been in a long time

“I was thinking about the world and how there is more uncertainty in the world than there’s been in a long, long time in a lot of ways. If you think about the Middle East situation which is a completely new situation and the problems there, obviously the soft Brexit, hard Brexit and what’s going to happen there. We have our issues here. We have North Korea, which is kind gone the back burner for a while, but still firing missiles, and of course you have the Brazil situation coming back again and you have the Russia situation, there is just so much uncertainty, even highlighted maybe yesterday by the treasury paper coming out which leads to more uncertainty as to whether those things will or will not be — will not come to fruition on what we’re doing. So I think for economic growth there is just so much uncertainty in the tax rules here. What’s going to happen there? I think people are just waiting. And so although the consumer seems to be growing at a relatively good pace, the corporate side just seems to be in that uncertain phase where they want more certainty in the world before they make the next decisions.”

Getting harder to differentiate between spending on business and spending on tech

“we’re trying to use some of the mobile expertise that we’ve developed in the consumer side, now into institutional side. So we hope to be able to have a good mobile offering. Remember, we can’t trade on the mobile, but the way we get information to people to our traders to our sales people to our clients, using some of the expertise we’ve developed in mobile. Hopefully on the institutional side we will be able to do that, but I don’t think [indiscernible], I think — the thing is the technology spend and business spend is getting closer and closer together, not farther and farther apart. It’s hard to differentiate between, well, are you investing in a new branch or is it the technology in the branch? Are you investing in — with clients, or you investing in a trading system, or is it in a mobile platform. It’s almost — well, you say tech dollars, but the tech dollars basically is the business in a lot of these places.”