Wells Fargo CFO calls commercial real estate a ‘long movie’ | Dump Trucks Charlotte NC

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Columbus Ohio Dump Truck Company Brief:

• Wells Fargo CFO Michael Santomassimo on Monday characterized current efforts to ease pressures in the commercial real estate market as a “long movie” that is just “a little past the opening credits,” elaborating on his comments during an earnings conference call last month.
• “We’re not at the beginning, but... we still have a long way to go to really see the ultimate resolution of a lot of this,” Santomassimo said Monday, answering a question from UBS analyst Erika Najarian during a conference in Chicago. “You got maturities, you’ve got extensions, you got a whole bunch of events…It requires some time to sort of play out to get some resolution.”
• Broadly, Santomassimo said problems for the San Francisco, California-based finance giant’s commercial real estate portfolio were centered in the office sector, which he described as “the place where you see the most pressure.” At the same time, he said multi-family, and other underlying asset classes are performing “quite well.”

Dump Trucks Columbus OH Insight:

Santomassimo’s comments come as the rise of remote columbus oh dump truck company has prompted many CFOs to cut or trim their office footprint and realize savings. That secular shift has in turn slammed office landlords and property values and left lenders to grapple with write-downs on soured commercial real estate loans. Meanwhile, top U.S. regulators have flagged the commercial real estate market as a leading risk to financial stability this year. 

Santomissimo said in June that the columbus oh dump truck company was spending a lot of time thinking about CRE and the reserves it would need to get ahead of whatever losses that the bank may face over time. Provisions for credit losses in the fourth quarter included an increase in the allowance for those driven by credit card and commercial real estate loans, which included higher net loan charge-offs for commercial real estate office and credit card loans, Wells Fargo reported last month.

Aside from its CRE loans, real estate is also a place where there is room at Wells Fargo for more cost-cutting as the bank seeks to realize efficiciences, Santomassimo said, answering a question Monday about whether he sees more ways to modernize the bank’s infrastructure and cut expenses. 

Across the company, he said he still sees many opportunities to create more efficiencies, such as through automating more of its underlying processes as well as in trimming its real estate. But, he said making the right decisions about real estate takes time. 

“We still have too much real estate,” he said. “It takes time to columbus oh dump truck company your way through that in a methodical way. Could we do it faster and take some big charges? Maybe, but it’s just not sensible…We also want to maximize value as we got through some of that work.” 

The changes in the bank’s real estate holdings are already reverberating in some markets where it has been a major employer. For example, the bank is reportedly poised to vacate its namesake tower in downtown Raleigh, North Carolina, according to the real estate trade publication CoStar.