He told a Boise audience Aug. 17 that the problem is a lack of demand.
“We can’t find qualified borrowers who want to borrow money,” he said during the Boise Metro Chamber of Commerce’s CEO Speaker Series luncheon. “They don’t see the opportunity to invest in a profitable way.”
Wells Fargo’s profits jumped 20 percent to $3.1 billion during the second quarter compared to the prior period, even while total loans were down 7.5 percent compared to a year ago, $766 billion at the end of June compared to $822 billion at the same point last year.
Stumpf, CEO since 2007, said one strong indication that businesses are reluctant to borrow is that they’re leaving lines of credit unused at record low levels, currently 35 cents on the dollar.
He devoted his talk to a discussion about why record profits on Wall Street have yet to translate into a stronger economy that would lead to better prospects for Main Street.
“One seems to be doing very well,” he said. “One seems to be stuck in a ditch.”
The reasons he cited include: devalued home prices that make everyone feel poorer; the lingering effects of too much debt taken on by consumers, businesses and governments; better technology that allows companies to get by with less; more outsourcing that prevents a bigger pickup in hiring; regulatory uncertainty that has businesses unwilling to invest; and further declines in American manufacturing that mean companies restocking on inventory are buying from abroad.
Wells Fargo is one of the area’s largest employers, with 2,278 full-time Idaho workers.
Editor’s note: Wells Fargo ranks fourth on the annual IBR Largest Employers TopList, featured in the Aug. 23 Focus section.