Q & A Highlights

Q : Mike, could you unpack the deposit expectations embedded in slide 18 and the NII outlook? How does this play into the paydown of higher-cost borrowings throughout the year? A : Michael Santomassimo, CFO: We've seen stabilization in the mix between noninterest-bearing and interest-bearing deposits. We expect this to continue, with some absolute growth across the consumer franchise. Pricing hasn't moved much, but promotional savings and CD rates have come down. We don't expect pricing pressure on the consumer side.

Q : Can you discuss the profitability of the credit card business and its impact on ROE? A : Michael Santomassimo, CFO: We're starting to see the earliest vintages of new products mature and become more profitable. Credit performance is on track with our models, and new account growth continues. Profitability will start to come through more meaningfully over the next year or two.

Q : Charlie, can you give examples of changes post-lifting of the OCC consent order and their impact on ROE? A : Charles Scharf, CEO: We've rolled out a standard incentive framework across branches, which was piloted earlier. This has led to better performance in pilot branches, and we expect results to improve more meaningfully over the near to medium term.

Q : How should we think about the buyback appetite in 2025, given potential organic growth opportunities? A : Michael Santomassimo, CFO: We'll prioritize serving customers and organic growth opportunities. Given the asset cap, we'll continue returning capital to shareholders. We don't believe we need to increase our CET1 percentage, so buybacks will be managed based on opportunities and risks.

Q : What are the risks outside of geopolitical concerns that could impact Wells Fargo? A : Charles Scharf, CEO: Cyber risk is the biggest concern, which is why we invest heavily in this area. The strength of the US economy is crucial for our success, as it drives customer success and, consequently, ours. Anything that risks the US economy is a risk for us.

For the complete transcript of the earnings call, please refer to the full earnings call transcript .

This article first appeared on GuruFocus .