“I wouldn’t expect large growth on the consumer side in any way, potentially even a net decline,” Wells Fargo Chief Financial Officer Mike Santomassimo said Tuesday (June 10) at the Morgan Stanley U.S. Financials Conference, according to a Reuters report.
When it comes to commercial loans, Santomassimo said the uncertainty around tariffs makes it difficult to predict the sector’s growth this year, according to the report.
The news came on the same day it was reported that Citigroup Head of Banking Vis Raghavan said at the same conference that Citigroup is preparing for a possible decline in consumer financial health by putting aside more provisions for potential losses on loans.
“Given the macro environment, etc., cost of credit compared to last quarter, we expect to be up a few hundred million,” Raghavan said, adding that the bank’s credit reserve build changes frequently based on its outlook.
The Federal Reserve’s May Beige Book released Wednesday (June 4) showed mixed signals across the Federal Reserve districts in terms of consumer credit conditions.
Overall, credit standards continued to ease, and loan interest spreads narrowed, indicating increased lending activity. Banking contacts reported healthy credit quality, sustained demand for loans and ongoing success in attracting deposits.
Consumer credit data released by the Federal Reserve Friday (June 6) indicated that the aggregate tally of consumer credit surged by $17.9 billion, which outpaced consensus estimates of an $11.4 billion gain.
The data indicated that consumers turned to credit to pay for goods and services during an April rush that showed they sped up purchases as tariffs took effect that month, PYMNTS reported at the time.
At the Tuesday conference, Santomassimo also said Wells Fargo is seeing that there may be an improvement in dealmaking and that the bank is starting to see “a little bit of share growth,” according to the Reuters report.
“We are certainly seeing lots of green shoots in terms of deals that we just wouldn’t have been a part of earlier,” Santomassimo said, per the report, referring to the fact that the bank was released this month from a cap on its assets that was imposed after its fake accounts scandal.
