Wells Fargo Reminds Everyone: “We’re the Number One Auto Lender”

For at least the third time this year, Wells Fargo & Co. Senior EVP and CFO John Shrewsberry has reminded everyone that Wells Fargo is the nation’s largest auto lender at a public event such as a conference or investor presentation.

“We’re the largest auto lender in the country with particular strength in the used car market,” Shrewsberry said at the Bank of America Merrill Lynch Financial Services Conference yesterday, according to the transcript from Seeking Alpha.

And then, he said it again.

“I mentioned we’re the number one auto lender in the country,” he said to the room full of analysts.

The bank’s auto loans were up $5.5 billion or 11% from last year, reflecting strong originations, while the bank says it remained focused on its risk discipline.

One unidentified analyst wanted to hear Shrewsberry’s thoughts on the anxiety surrounding the auto finance space these days: “Maybe you could share some perspective from Wells Fargo into what you see both at the industry level and then what you’re doing in order to stay out of the line of fire, if I can use that word?” the analyst asked.

Shrewsberry agreed, saying there has been a lot of regulatory focus on auto as of late. He told the group that regulators first want to know what banks are putting on their books. Next, they wonder how retail customers are being treated by auto paper originators.

For Wells Fargo, Shrewsberry said the focus has been on how well the portfolio is performing. “Frankly, it hasn’t changed that much in terms of its aggregate or component risk characteristics. Recently, we’ve skewed a little bit more toward what we would describe in our own underwriting criteria as the super prime customer. But we do have a full spectrum of credit customer in the book,” said Shrewsberry.

Since the credit crisis, Wells Fargo has been exceeding its own expectations for risk adjusted return in all bands of credit quality, he said. There’s definitely been a drive toward a more average cyclical average of risk adjustment return, which in the bank’s estimation is still generally acceptable, Shrewsberry explained.

“Sometimes it gets unacceptable for the most high credit quality customers and sometimes it gets unacceptable for lower credit quality customers depending on who you’re competing with and what their behavior is,” he said.

For now, the bank is betting that it will continue to be able to brag about its status as the “number one” auto lender in the nation. “We anticipate that it will continue performing the way that it has” Shrewsberry said.