✦ The Future BetsNarrow moat

Wells Fargo (WFC) — the future bets

Wells Fargo's future bets are about earning more on the deposits it already has, not about finding new ones.

Wells Fargo's plans for the next few years are the plans of a bank that has been let out. The headline is a return target: the bank says it achieved its prior target of 15% and has set "a new medium-term target of 17-18%"1. The first half of 2026 ran at 16.1%2.

2026 guidance vs first half ($bn)~50NII guide24.4NII H1~55.7Expense guide28.0Expense H1Wells Fargo Q2 2026 presentation; first half from Q1 and Q2 2026 releases
Tracking the guidance at the half.

The bets behind it are specific. The bank is growing consumer lending, with new credit card accounts up 46% and auto originations up 41% in the second quarter of 20263. It is shrinking parts of home lending, having said it plans "to reduce the amount of residential mortgage loans we service"4. And it still has about $22.7 billion of authority to buy back its shares5.

For 2026 the bank expects net interest income of about $50 billion and noninterest expense of about $55.7 billion6. Its January outlook assumed "Two to three fed funds rate cuts in 2026"7.

None of these bets widens the deposit moat directly. Together they are an attempt to earn more on it: more consumer lending funded by cheap deposits, less capital in low-return mortgages, and fewer shares.

The bank's January outlook also assumed that average loans in the fourth quarter of 2026 would be up by mid-single digits on the fourth quarter of 20258. Of the roughly $50 billion of expected net interest income, about $48 billion is outside Markets and about $2 billion inside it9, against $46.7 billion and $0.7 billion in 202510.

What the bets leave out is telling. There is no large acquisition, no new country and no new business line; the plan is to do more of what the bank already does, now that it may. That is a sensible plan for a bank with a cheap deposit base, and it means the results will be judged against its own past rather than against a new story.

The return target is the measure of all four. A full-year return on tangible common equity of 17% or more in 2026 would mean the plan was on time; a year below 15% would say the first half had been the market.

Moat trajectory: Widening

H1 2026 ROTCE 16.1% against a 17-18% target.

The number that tests this moat
Reported
New credit card accounts, latest quarter
662 thousand, +46% (Q2 2026)

The consumer lending bet in one number; a return to flat card growth would mean the bank was not using its freedom where its deposits are.

Source: Wells Fargo Q2 2026 earnings presentation ↗
✦ Future bets — beyond today's moat
✦ FUTURE BET 01
Seventeen to Eighteen Percent
Wells Fargo's 17-18% return target is higher than anything it has earned in a full year since at least 2015.
✦ FUTURE BET 02
Cards and Cars
Wells Fargo's card and auto push is the one growth bet that uses its cheap deposits directly.
✦ FUTURE BET 03
Servicing Fewer Mortgages
Wells Fargo is deliberately shrinking the mortgage servicing business that brought it several of its regulatory problems.
✦ FUTURE BET 04
$22.7 Billion of Buybacks Left
Wells Fargo has $22.7 billion of buyback authority and less capital than before to spend it.
References
  1. ReportedThe headline is a return target: the bank says it achieved its prior target of 15% and has set "a new medium-term target of 17-18%".
    Wells Fargo fourth-quarter 2025 earnings release, Form 8-K exhibit 99.1 - full-year 2025 results, net interest margin, severance, the $15 billion of gross expense reductions and the new 17-18% ROTCE target. — Q4 2025 · publ. 14 January 2026 · source ↗
  2. ReportedThe first half of 2026 ran at 16.1%.
    Wells Fargo second-quarter 2026 earnings release, Form 8-K exhibit 99.1 - consolidated results, credit quality, capital and the chief executive's comments. — Q2 2026 · publ. 14 July 2026 · source ↗
  3. ReportedThe bank is growing consumer lending, with new credit card accounts up 46% and auto originations up 41% in the second quarter of 2026.
    Wells Fargo second-quarter 2026 earnings presentation, Form 8-K exhibit 99.3 - segment returns, deposit cost, market shares and the 2026 outlook - segment returns, average balances and business highlights. — Q2 2026 · publ. 14 July 2026 · source ↗
  4. ReportedIt is shrinking parts of home lending, having said it plans "to reduce the amount of residential mortgage loans we service".
    Wells Fargo 2025 Annual Report to Shareholders (financial statements, MD&A and segment note), part of the Form 10-K for fiscal 2025 - financial highlights, income statement, capital, share repurchases and ratios. — FY2025 · publ. 24 February 2026 · source ↗
  5. ReportedAnd it still has about $22.7 billion of authority to buy back its shares.
    Wells Fargo Form 10-Q for the quarter ended 30 June 2026 - balance sheet, capital requirements, interest rate sensitivity, segment assets, headcount and legal actions. — Q2 2026 · publ. 28 July 2026 · source ↗
  6. ReportedFor 2026 the bank expects net interest income of about $50 billion and noninterest expense of about $55.7 billion.
    Wells Fargo second-quarter 2026 earnings presentation, Form 8-K exhibit 99.3 - segment returns, deposit cost, market shares and the 2026 outlook - the 2026 outlook, deposit cost and loan yield. — Q2 2026 · publ. 14 July 2026 · source ↗
  7. ReportedIts January outlook assumed "Two to three fed funds rate cuts in 2026".
    Wells Fargo fourth-quarter 2025 earnings presentation, Form 8-K exhibit 99.3 - the 2026 outlook and its rate assumptions. — Q4 2025 · publ. 14 January 2026 · source ↗
  8. ReportedThe bank's January outlook also assumed that average loans in the fourth quarter of 2026 would be up by mid-single digits on the fourth quarter of 2025.
    Wells Fargo fourth-quarter 2025 earnings presentation, Form 8-K exhibit 99.3 - the 2026 outlook and its rate assumptions. — Q4 2025 · publ. 14 January 2026 · source ↗
  9. ReportedOf the roughly $50 billion of expected net interest income, about $48 billion is outside Markets and about $2 billion inside it, against $46.7 billion and $0.7 billion in 2025.
    Wells Fargo second-quarter 2026 earnings presentation, Form 8-K exhibit 99.3 - segment returns, deposit cost, market shares and the 2026 outlook - segment returns, average balances and business highlights. — Q2 2026 · publ. 14 July 2026 · source ↗
  10. ReportedOf the roughly $50 billion of expected net interest income, about $48 billion is outside Markets and about $2 billion inside it, against $46.7 billion and $0.7 billion in 2025.
    Wells Fargo fourth-quarter 2025 earnings presentation, Form 8-K exhibit 99.3 - the 2026 outlook and its rate assumptions. — Q4 2025 · publ. 14 January 2026 · source ↗
Sources
Generated September 28, 2026