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Extraction Summary
3
People
4
Organizations
0
Locations
1
Events
2
Relationships
1
Quotes
Document Information
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Financial research report page
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Summary
This document from a Bank of America Merrill Lynch conference discusses Wells Fargo's (WFC) progress on regulatory compliance and the positive view on potential changes to the annual stress test process. It includes poll results showing investor sentiment on the biggest catalysts for WFC shares and expectations for its long-term dividend payout ratio. The document also begins a section on Zions Bancorporation (ZION), noting constructive post-election sentiment on growth prospects.
People (3)
| Name | Role | Context |
|---|---|---|
| Mr Blinde | ||
| Gov. Tarullo | ||
| Paul Burdiss |
Organizations (4)
| Name | Type | Context |
|---|---|---|
| WFC | ||
| Zions Bancorporation (ZION) | ||
| BofA Merrill Lynch | ||
| Bank of America Merrill Lynch |
Timeline (1 events)
2016 Future of Financials Conference
Relationships (2)
→
Representative
→
→
CFO
→
Key Quotes (1)
"Mr. Blinde noted that potential changes to the annual stress test process, as proposed by Gov. Tarullo in Sept., is a "real" positive, specifically as it reduces any variance between how the stressed risk weighted asset balance is calculated."Source
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Quote #1
Full Extracted Text
Complete text extracted from the document (2,276 characters)
Π
WFC continues to make progress on regulatory compliance. As of 3Q, WFC's
current total loss absorbing capacity (TLAC) shortfall was 2.1% of risk weighted
assets or $29bn ($43bn including its internal buffer), an $8bn QoQ improvement.
That said, Mr Blinde assured investors that WFC will continue to focus on deposit
growth (66% of total funding) even as its long-term debt needs continue. WFC is
compliant with the liquidity coverage ratio (LCR).
WFC continues to make progress on regulatory compliance. As of 3Q, WFC's
current total loss absorbing capacity (TLAC) shortfall was 2.1% of risk weighted
assets or $29bn ($43bn including its internal buffer), an $8bn QoQ improvement.
That said, Mr Blinde assured investors that WFC will continue to focus on deposit
growth (66% of total funding) even as its long-term debt needs continue. WFC is
compliant with the liquidity coverage ratio (LCR).
Π
Potential changes to annual stress test process viewed as positive. Mr. Blinde
noted that potential changes to the annual stress test process, as proposed by Gov.
Tarullo in Sept., is a "real" positive, specifically as it reduces any variance between
how the stressed risk weighted asset balance is calculated. This is likely positive for
the majority of investors polled (31%) who think capital return is the biggest
catalyst for the stock and the (70%) who see the dividend payout growing towards
the 40-50% range long-term (currently 37%).
Potential changes to annual stress test process viewed as positive. Mr. Blinde
noted that potential changes to the annual stress test process, as proposed by Gov.
Tarullo in Sept., is a "real" positive, specifically as it reduces any variance between
how the stressed risk weighted asset balance is calculated. This is likely positive for
the majority of investors polled (31%) who think capital return is the biggest
catalyst for the stock and the (70%) who see the dividend payout growing towards
the 40-50% range long-term (currently 37%).
Chart 49: What do you think is the biggest catalyst for WFC shares over the next 12-24 months?
35%
31%
30%
25%
24%
21%
20%
14%
15%
10%
10%
5%
0%
Better clarity
around the full
impact of the sales
practices issue
Delivering clean
and consistent
earnings results
close to or better
than current
consensus
Achieving solid
revenue growth
regardless of the
rate environment
Renewed focus on
expense
management to
drive the efficiency
ratio lower
Accelerating
capital return, with
focus on the
dividend
35%
31%
30%
25%
24%
21%
20%
14%
15%
10%
10%
5%
0%
Better clarity
around the full
impact of the sales
practices issue
Delivering clean
and consistent
earnings results
close to or better
than current
consensus
Achieving solid
revenue growth
regardless of the
rate environment
Renewed focus on
expense
management to
drive the efficiency
ratio lower
Accelerating
capital return, with
focus on the
dividend
Source: BofA Merrill Lynch Global Research
Chart 50: As a result, what do you think WFC's long-term dividend payout ratio will be?
40%
35%
35%
35%
30%
25%
20%
16%
15%
14%
10%
5%
0%
Near the current level
of 37%
40-45%
45-50%
>50%
40%
35%
35%
35%
30%
25%
20%
16%
15%
14%
10%
5%
0%
Near the current level
of 37%
40-45%
45-50%
>50%
Source: BofA Merrill Lynch Global Research
Π
Note: WFC is scheduled to report October customer activity in Retail Banking on
Thur, Nov. 17th at 9am ET.
Note: WFC is scheduled to report October customer activity in Retail Banking on
Thur, Nov. 17th at 9am ET.
Zions Bancorporation (ZION), C-3-7, Underperform
Π
Sentiment post-election appears constructive on growth prospects. Consistent
with other bank management teams speaking at this year's conference, CFO Paul
Burdiss noted that small businesses have been reluctant to invest given the
Sentiment post-election appears constructive on growth prospects. Consistent
with other bank management teams speaking at this year's conference, CFO Paul
Burdiss noted that small businesses have been reluctant to invest given the
Bank of America
Merrill Lynch
2016 Future of Financials Conference | 17 November 2016 33
Merrill Lynch
2016 Future of Financials Conference | 17 November 2016 33
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