Leading market positions in numerous U.S. banking businesses Longstanding, very strong deposit franchise Robust earnings generation with substantial contribution from fee income and recent rise in capital ratios Loan asset quality that should remain steady, although the net charge-off rate is likely at a cyclical low Prolonged reputational and legal issues following regulatory probes on improper retail sales practices Additional controls issues in auto business and ongoing business reviews could reveal other operational issues that elevate headline risks High exposure to the residential mortgage market including on-balance-sheet loans, in addition to very large origination and servicing activities Our negative outlook reflects the possibility that we could lower our ratings on Wells Fargo&Co. (WFC) over the next two years.
