Wells Fargo CEO John Stumpf spoke with FOX Business Network’s (FBN) Maria Bartiromo about the real estate market. Stumpf said, “we’ve always been very selective in how we make our loans, our portfolio has never been better. And we’re seeing growth.” Stumpf went on to talk about interest rates saying, “I am in a position that you’re going to see long rates rise a lot slower than a lot of people think they will” and that “the rest of the world has lower rates.”
Wells Fargo CEO John Stumpf on the real estate market:
“I think that, for the stuff that we do, you know, and we’ve always been very selective in how we make our loans, our portfolio has never been better. And we’re seeing growth. I mean, if you fly around the country, almost any place you land, you see cranes. It’s like a crane convention going on. And that surely is true in the Bay Area. It’s true here in — I came in yesterday in Manhattan. So things get frothy from time to time, we’re frothy. Interest rates have probably a little to do with that. But I wouldn’t say overbuilt; surely not on the residential side. I mean, new home starts are millionaires. So that’s well under. On the commercial side, it tends to be more about what happens with infrastructure, you know, the public side tends to happen later. The private side tends to happen first.”
Wells Fargo CEO John Stumpf on whether he sees a big increase in refinancing:
“On the residential side, absolutely yes. And so we are going into our second quarter with a 44 billion pipeline, and that is a second highest pipeline we’ve seen now in two years. So there’s a refinance part of that. Also FHA has reduced their guarantee fee so that puts more of those in play. But it’s much more of a purchase money business today, and we’ll see what — then we’re starting the sell season, the selling season now, or the buying season. So let’s see what happens.”
Wells Fargo CEO John Stumpf on interest rates:
“I am in a position that you’re going to see long rates rise a lot slower than a lot of people think they will. The rest of the world has lower rates. They’re starting their QE programs, which have a way of damping rates.”
Wells Fargo CEO John Stumpf on acquiring GE Capital:
“Well, these loans are very much like the loans we make and we’re the largest commercial real estate lender in the country. And this kind of a once in a lifetime opportunity. Rarely does a big player in the market exit the market and give us an opportunity. So as Steve had mentioned, they’re great partners of ours. They took the mezzanine and the things that didn’t fit for our bank portfolio, but we financed some of those and we put the rest in our portfolio.”
Wells Fargo CEO John Stumpf on where he sees growth in the next five to ten years:
“First of all we are in the real economy. 97 percent of our revenues are here in the United States. We love international business but it’s basically to support our U.S. customers…With a huge deposit base. We love that. So we love taking deposits, making small business loans, auto loans, car loans, commercial real estate, energy…and as America grows, we grow with them. But the other thing — we still have 7,000 banks. And there is consolidation going on, even if it’s not one buying the other. Customers are moving, you know, and they’re making their own choices. We’re growing faster today than I’ve seen in my entire history in the industry. Because millennials in particular love the convenience of what we had to offer. They love the distribution. The omnichannel, we grew net new primary checking accounts, which I really use as proxy for customer. It’s where you work, where you get paid. That and they put it in the bank, that’s where they operate out of. By 5.7 percent last year. That’s unheard of. We grew $100 billion in deposits. That’s — at 9 basis points. That’s unheard of.”
Wells Fargo CEO John Stumpf on whether wealth management is an area he is really looking at:
“There’s nothing even close as number two…we’d love to have more asset management, so forth. Well, there’s nothing more, nothing that is — because think of — I think there’s going to be like $41 trillion of wealth transferred from one generation to another one in the next 20 years.”
