Credit Continues to Be a Strong Story: Sloan

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Jan.14 (Bloomberg) –- Wells Fargo & Co. Senior Executive Vice President & CFO Tim Sloan discusses quarterly earnings and how they've positioned themselves for 2014 with Trish Regan and Adam Johnson on Bloomberg Television's "Street Smart." (Source: Bloomberg)

On the surface, they are good.

But the reality is that it is tough out there.

There is cost-cutting.

My question is as you look forward, how much more cost- cutting can you envision?

At which point do we need to envision a turnaround?

More people taking out home loans.

The primary driver for our earnings this quarter was actually revenue growth on a sequential quarter basis.

We saw very good loan growth.

$13.5 billion.

That is 7.0% annualized.

It included some mortgages that we put on our balance sheet.

The growth is diversified.

Outside of our home mortgage origination business, revenues were up in many of our fee line items.

Retail brokerage, our retail baking business, our credit card business.

Again, it is a lot about mortgage at wells fargo.

We love the mortgage business.

It is a great business.

But it is just one of our businesses.

We were up 10% year-over-year.

Certainly our cost were down, but that was not the primary driver.

Credit was improved.

If you look ahead, we have a fed that may at some point raise interest rates.

What does that mean for you?

Is that good news if you are in a higher interest rate environment?

It is a good question and it is a complicated answer because it depends on whether it is the short end or the long end of the curve and what the slope of that curve is.

What we have been able to demonstrate, even in an environment where reads are up 100 basis white year-over-year, which had an impact, we were able to generate record earnings.

That has been the case for the lack -- last 16 quarters.

The interest rate environment is always different.

We need to position ourselves so that we can be successful, regardless of the interest rate environment we are in.

Has loan quality improved and you are able to take lower reserves amount of dollars?

You release 1.8 million in the quarter.

How much more money do you have a site that you could release?

Good question.

Let me correct something.

The reserve release for the fourth quarter was $6 million.

It was a reduction of what we had released in the third quarter.

We still believe that there is improvement that is going to happen in our credit portfolio.

The tailwinds that we have in terms of rising home prices and improving economy continue.

Our loan-loss rate was down.

We believe that we will have some reserve release.

I do not know what the amount will be.

Credit continues to be a strong story.

What about dividends and share buybacks?

You returned money to shareholders through the full year of 2013. what are your plans to look ahead now?

It is a great question.

We are very proud of the fact that we were able to return money to our shareholders last year.

We just submitted our capital plan for 2014. in that plan, we asked for an increase in our dividend, as well as an increase in our ability to purchase more shares.

We would like to do more than $11.4 billion in 2014 full top there have been 6200 layoffs since october.

That has to do with the fact that refinancings are down.

What is the outlook 2014. it continues to be one in which we will grow the company.

The employment levels will be in terms of the number of team members at wells fargo.

I do not know.

We believe we can grow our revenues and earnings.

Hopefully that means we can grow our team members.

Before relate you go, you mentioned the diversification of the business is that you are in?

What is the most important part of your business to grow this year?

It is a hard question because we have over 90 different businesses.

That is part of the revenue story and the diversification story.

We will be focused on continuing to provide the right product and services to our customers.

You have seen that in terms of year-over-year growth in our retail brokerage business, our investment banking business, our car business.

I could go on and on.

It will not be one business, it will be a host of them.

That is what gives investors the confidence that we can continue to grow the company.

Thank you so much.

Always great to see you here.

I appreciate being here.

This text has been automatically generated. It may not be 100% accurate.


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