Wholesale Banking Investor Day 2018

[Pages:30]Wholesale Banking

Perry Pelos Senior Executive Vice President

May 10, 2018

? 2018 Wells Fargo & Company. All rights reserved.

Business Overview

Wholesale Banking overview

Wholesale Banking operates nine major lines of business that serve diverse market and customer segments, including business banking, middle market, large corporates, financial institutions and municipal, state and local governments.

Presence

28,000+ team members 586 domestic locations 34 countries and territories (1)

2017 Contribution

to WFC

Revenue

Wholesale Banking 34%

Net Income

Wholesale Banking 45%

(1) By year-end 2018, subject to relevant regulatory approvals.

Wells Fargo 2018 Investor Day

Wholesale Banking 2

Solid and diversified financial performance

($ in millions)

Net Income After Tax (NIAT)

$9,845

$9,942

$9,914

2015

2016

2017

Revenue

$27,878

$31,047

$30,000

2015

2016 Operating Leases

Provision Expense

$1,073

2017

$27 2015

2016

$(19) 2017

Noninterest Expense

$13,597

$15,901

$16,624

Wells Fargo 2018 Investor Day

2015

2016 Operating Leases

2017

Wholesale Banking 3

Operational excellence drives long-term results

Wholesale is targeting a 15% to 17% ROE (1) and an efficiency ratio (2) of < 50% through the cycle

Objectives

Key initiatives

Leverage our scale and simplify the business

Optimize Wholesale's portfolio of businesses Drive simplification, operational excellence and

scale initiatives (e.g., lending transformation)

"Reimagine" the business in service of customers

Build on the strengths, scale and successes of our core businesses to fortify the foundations for growth

Maintain our strong Focus on the needs of our long-term customer

credit discipline

relationships through cycles

Complete regulatory Satisfy regulatory requirements, while reducing

remediation projects elevated regulatory and remediation expenses to a normal run-rate/business-as-usual level

(1) Return on equity (ROE) measures the operating segment's net income applicable to common shareholders as a percentage of average operating segment allocated common equity.

(2) The efficiency ratio is noninterest expense divided by total revenue (i.e., net interest income plus noninterest income).

Wells Fargo 2018 Investor Day

Wholesale Banking 4

Highlighting our approach to risk management

Loan portfolio diversification

($ in billions, 2017 average balances) Total Wholesale Banking Commercial Real Estate Divisions Commercial Lending Divisions Middle Market Banking Asset Backed Finance (1)

Corporate Banking Group

Wells Fargo Capital Finance (1)

Business Banking

Equipment Finance (1)

$352 $68 $67 $44 $44 $42 $36

Financial Institutions Group

Government & Institutional Banking

Commercial Distribution Finance (1)

Wells Fargo Securities, CIP (2)

$17 $13 $12 $8

$466 $114

Growth % (2017 vs. 2016)

3% 3% 3% 1% 11% -6% 7% 1% 6% -3% 3% 48% -24%

(1) Part of Wells Fargo Commercial Capital (WFCC). (2) Credit Investment Portfolio (CIP), formerly Principal Investments.

Wells Fargo 2018 Investor Day

Wholesale Banking 6

Wells Fargo's continued strong credit quality in the C&I market

With our prudent and disciplined approach to credit risk, we have historically recorded lower losses in comparison to other U.S. commercial banks (1)

3.5 annual net charge off %

3.0

2.5

2.37

Other U.S. banks

2.0

1.69

1.71

1.5

1.53

Wells Fargo

1.0

0.69

0.5

0.51

0.0

0.98 0.95

Other U.S. banks Avg net CO %

Wells Fargo Avg net CO %

0.84 0.78

0.52 0.48

0.31 0.22

0.23 0.14

0.28 0.24

0.62 0.42

0.77 0.70

0.37 0.25

-0.5

2007

2008

2009

2010

2011

2012

2013

2014

(1) Federal Reserve form FR-Y9C compiled by SNL/S&P. Data from all U.S. commercial banks. WFC data is total firm.

Wells Fargo 2018 Investor Day

2015

2016

2017

Wholesale Banking 7

 ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download