Wells Fargo says 'on track' for $4B in expense reductions by end of 2019
CFO John Shrewsberry says bank takes consent order seriously and will work to fully satisfy all the order's requirements. Says bank believes it can meet customers' financial needs and continue to deliver strong results without growing the balance sheet near term. Says earnings impact from managing within Consent Order asset cap was relatively modest in Q1 due to minimal actions taken in quarter. Says impact is expected to increase in subsequent quarters, but continues to estimate that the net income after tax impact will be within originally estimated $300M-$400M range for 2018. Expects originations to increase in Q2. Expects production margin to continue to decline in Q2. Expects seasonally higher personnel expenses to decline in Q2 but salary expenses to increase. Expects FY18 total expenses $53.5B-$54.5B, includes approximately $0.6B of typical operating losses, excludes litigation and remediation accruals and penalties. Expects efficiency initiatives to reduce expenses by $2B by end of 2018. Says on track for $4B savings target by end of 2019. Expects savings to go to the "bottom line" and be fully recognized in 2020. Says remains focused on returning more capital to shareholders.