Wells Fargo at Barclays Conference Notes

Putting more cash to work, lower interest rates for longer

“Yes, so, I don’t think we have too much liquidity. We have gotten incrementally more invested over the last few quarters and we made a real point of it in our last quarter and I mentioned it today with a view toward a lower for longer interest rate environment and shareholders really not getting paid for us to sit and cash and wait for an ultimate increase in short-term or long-term rates.”

It’s really hard to be a global bank

“The bigger question of whether we are going to be – we are going to try be something outside the US like we are inside the US. It’s one where I would say probably not. I think it’s getting substantially harder to be a global bank. US regulators aren’t crazy about it, foreign regulators aren’t crazy about it.”

Foreign banks may have some funding advantage, but we’ll keep doing what we’re doing

“Foreign banks who are getting pulled out of the – pulled or pushed out of US are tougher in their home markets and we love to compete with foreign banks when they come into the US and similarly, they have the advantages in their home countries that we have here which don’t have enough of an advantage. But they’ll have the funding advantage, the relationship advantage. So, we’ll keep doing what we are doing and over the course of time, things may change a little bit. But I don’t have – it’s not in the current play book to try and replicate what we have here.”

Mortgage credit is widely available

“So the purchase market has improved, jobs picture has improved, availability has improved, credit I think is widely available and with the exception maybe of the FHA situation which I’ll talk about in a minute. But, we are talking about a $1.2 trillion, $1.3 trillion mortgage market overall. My guess is setting the refinancing spike at the beginning of the year off to the size that’s probably two-thirds to three quarters purchase market for the foreseeable future in this particular rate environment.”

Analyst comment

“with respect to credit quality, today, so far that we’ve heard, kind of I would say, maybe concerns around energy, auto, leverage lending, multi-family, kind of – all kind of come up”

Few of us in the regulated community are participating in the most aggressive activity

“in leverage lending, I think the – the regulatory impact has been that fewer of us in the regulated banking community both Fed and OCC regulated banks are participating in the most aggressive activity. So I think that bothers some financial institutions who compete based on being really aggressive. It plays to our sweet spot and it’s actually – it’s not hurting us.”