Michael Santomassimo: Yes, I’ll take that. Look, I think we’ve — as you said, we’ve just been methodically investing in the capabilities with a focus on supporting our core clients more than — more — with more capabilities versus like trying to expand the scope of what we do in a way that just doesn’t fit who we are. And so I think that’s what you’ve seen us try to do there in those businesses. So businesses like FX and rates and just — it’s sort of methodically sort of adding people in a couple of slots or improving technology. And we’ve certainly been the benefit of some volatility in the market this year. So as you know, that could change pretty quickly one way or the other. But I think as we look at some of these businesses, what we’re focused on is just adding more clients, more flows, more incrementally each month and each quarter.
And so whether it ends up being $1 billion plus or minus a quarter — per quarter, I think we’ll see as we go, but we’re pretty pleased with what we’ve seen so far. And there isn’t a big onetime event that happened in the quarter that drove the results. And so that’s good to see as well. And you’re also not seeing big growth in market risk RWA as we do this as well. And so that’s part of what we’ve been trying to do as well is kind of sweat the balance sheet more and make sure that we’re getting paid for the exposure and the risk we’ve got there. And so we’re happy to see that, it’s starting to come together. And we’re under no illusions, though, that 3 quarters is like success, right? We’ve got to do this over a long period of time and continue to add capabilities and clients.
Operator: The next question will come from Scott Siefers of Piper Sandler.
Robert Siefers: Was hoping maybe, Mike, you could spend another moment sort of discussing RWA mitigation in light of the Fed capital proposals. I guess, specifically, I was hoping for maybe a little more color. I know you touched on it in some of the earlier remarks, but the sale of the $2 billion in private equity. And then maybe if you could also discuss the new agreement with Centerbridge for direct lending, just sort of how all these factor into your thinking here.
Michael Santomassimo: Sure. When you look at mitigation — I’ll just give you some examples of the types of things we’re thinking about. So when you look at securities finance transactions, you have haircut — collateral haircut floors that get implemented. And I don’t want to get too technical on it because — but there’s some technical requirements there that just don’t seem to make sense to us. And so — but if they do get implemented as written, we’ll adapt and we’ll change the way we — what collateral we require from clients to do trades or we’ll reprice them. And so there’ll be a number of things that we can do like on transactions like that, but it gets very, very technical for each of the underlying deals. There will be — I know others have talked about this, too.
We’ll have to decide how much tax equity investing we do in renewables. If the risk weights hold there, it’s just — the math just doesn’t make sense from a return perspective. And so we’ll probably have to do less — we’ll probably do less of those. And so there’s a number of things like that as you go through each of the underlying portfolios just don’t make sense. And we’re going to — we’ll make the adjustments as we need to. Now we’re also in a position where we’ve got plenty of flexibility as we talked about in the prepared remarks, right? Our capital levels today are there with a buffer already. And so we have the flexibility to handle it however we think makes sense to — for each of the underlying businesses. And what we want to make sure we do is like we’re building real businesses and client relationships over a long period of time.
So it’s not about necessarily walking away from clients. It’s about finding ways to serve them in ways that both makes sense for them and from a return perspective for us. But it’s going to be a very, very granular conversation. Some of it will be repricing. You got 364-day revolvers that will need to be repriced. You’ve got — there’s a whole bunch of very technical things like that, that will get done over time once the rule is finalized. Switching to the partnership we have with Centerbridge. Look, it’s a — we have been getting demand from clients for a while now in the middle-market kind of mid-corporate space for solutions to help them in financing that they need where it likely wouldn’t make sense for us to put on our balance sheet anyway.
And so instead of having telling clients we can’t help them or having them go direct to somebody else, we built a partnership with Centerbridge that allows us to remain an adviser to a client and help them solve a problem they may have. And so that’s the way we’re thinking about it. And we’re excited to work with Centerbridge and that team, and they’re a very high-quality team, they have done a lot over time. And I think this gives us another arrow in the quiver to help us provide solutions for clients. And so it’s early, and it will grow over time, hopefully. And hopefully, clients will see it in the same way.
Robert Siefers: Okay. Perfect. And then maybe as a follow-up, might want to revisit — or I was hoping to revisit the NII discussion for a bit. I certainly appreciate all the comments on continuing mix shift and deposit pricing pressure. But I guess, as we get to this level at the end of the year, is the thought that there would still be on balance downward pressure on NII beyond that? Or is — as you see it, is there enough kind of asset repricing opportunity that would ultimately allow things to settle out maybe sooner as opposed to later?
Michael Santomassimo: Yes. I mean we’ll see. I think we do need to wait until we get towards the end of the year and into January for us to give you a real view on 2024. I mean, I think what the last number of quarters have — just show over and over and over that there’s a lot still to play out here. And to get too far ahead of ourselves on it for next year, I think, would be a mistake at this point. So — but look, the same — it’s the same drivers we’ve been talking about for a while, right? It’s like what’s going to happen with deposits, the mix, the pricing. And then to a lesser degree, right now, it’s loan growth, but it still matters over a long period of time as well.
Operator: The next question comes from Matt O’Connor of Deutsche Bank.
Matthew O’Connor: Can you just elaborate on the comment of tightening the credit box a bit? And then, I guess, specifically in credit card, thoughts there? I know you’ve been leaning into it and have had real good growth. And I think it’s still only about 5% of your loan book, but wondering your thoughts of, is this really the right time to be leaning into credit card maybe as we’re kind of later cycle.
Michael Santomassimo: Yes. I’ll start with credit card and come back to the broader point. So we started on a journey to transform that — the card business back in the fourth quarter of ’19, so right after really Charlie started. And what we’ve done since then is really refreshed — almost completely refreshed the product line. We still have a little bit more to do there. And so part of what you’re seeing come through in the results is actually putting out good products that people want to buy. And you’re seeing really — we have really good new account growth in the quarter, probably our best quarter in quite some time. And so it starts with just having a good product and good service behind it, and that’s the key driver, I think, of what you’re seeing here.
On the credit side on the new originations, the new accounts we’re adding are really good relative to the back book. And when you look at both — and even when you dig a little bit deeper there, there’s — the majority of them are still Wells Fargo Bank customers, but we’re seeing more and more traction with non-Wells Fargo customers, so first-time customers. And when you look at those first time to Wells customers, those — the credit profile is really good. And so we feel comfortable with like the risks that’s being added there. And we’re going to continue to look for pockets of risk. And if we see them, we’ll tighten it down. But in terms of what we’re seeing in originations, we feel good about what we’re seeing so far. Just more broadly on credit, we’ve said now for probably the last 4 or 5 quarters, we’ve been kind of incrementally tightening the credit box on the consumer side for a while.
