WELLS FARGO & COMPANY/MN WFC

Wells Fargo has undergone a significant transformation since late 2019, closing 13 regulatory orders and achieving $15 billion in gross expense saves, leading to a $3.6 billion reduction in expenses since 2019. The lifting of the asset cap is enabling more aggressive balance sheet growth, particularly in trading-related assets in Corporate and Investment Banking, which are up 50% since the end of 2023. This allows the company to compete more effectively and pursue growth in balance sheet-intensive businesses, while maintaining a focus on U.S. consumers and businesses, which account for over 95% of revenues.

The company is focused on domestic growth, leveraging its scale in Consumer Banking, Wealth Management, Corporate Banking, and Commercial Banking. Strategic investments have diversified revenue mix and grown fee streams, with revenue from these businesses increasing almost $5 billion since 2019. Key growth areas include reaccelerating consumer checking account growth, enhancing credit card offerings (leading to a 9% increase in new accounts in the first 9 months of 2025), and expanding the Corporate and Investment Bank, which has gained over 120 basis points of U.S. investment banking share since 2022.

Wells Fargo maintains a strong capital position, with a CET1 ratio of 11% in Q3 FY25, well above its new regulatory minimum plus buffers of 8.5%. The recent CCAR exam reduced the stress capital buffer by 120 basis points. The company repurchased $6.1 billion of common stock in Q3 and expects similar levels in Q4, with over $30 billion of capital above regulatory minimums. This excess capital, combined with over $20 billion in annual after-tax earnings, provides significant flexibility for growth and shareholder returns, targeting a 30-40% dividend payout ratio.

Credit performance remained strong and continued to improve in Q3 FY25, with the net loan charge-off ratio declining 4 basis points QoQ and 9 basis points YoY. Commercial net loan charge-offs were stable, with lower C&I losses largely offset by higher commercial real estate losses. Consumer net loan charge-offs declined $58 million QoQ to 73 basis points of average loans, reflecting continued consumer resilience due to income growth keeping pace with inflation and stable payment rates.

The company's efficiency agenda continues to drive results, with headcount declining 24% from a peak of 276,000 in Q2 2020 to 211,000 in Q3 2025, primarily through efficiency improvements rather than business sales. Significant opportunities for further efficiency gains are identified across third-party spend, real estate costs, and automation. While control and regulatory spend remains higher than in 2019, the company aims to optimize this over time^⏳ through technology and process redefinition.

The Wealth and Investment Management business is showing solid momentum, with revenue up 8% YoY. The launch of Wells Fargo Premier has contributed to a 47% increase in net investment flows into the program during the first 9 months of the year. Investments in the advisor and client experience, including improvements to the independent platform, have led to increased advisor retention and quality of recruits, with advisor attrition declining every quarter this year.