At this meeting, senior executives of Wells Fargo discussed the company's second quarter performance, emphasizing the improvement of net income, earnings per share, and return on tangible common equity. The company continued to make progress in business investments, achieving diversified revenue growth while maintaining strict control over costs and personnel. In addition, the removal of asset caps and the termination of multiple regulatory orders mark important milestones in the company's transformation, indicating a continuous improvement in credit performance.

With the removal of the asset cap, Wells Fargo plans to further deepen the discipline in its corporate culture based on risk and control agendas, and invest more time and resources in business growth and future planning. The company expects to take a more proactive strategy in supporting consumer, business, and community economic growth. Additionally, they plan to be more aggressive in consumer and business deposits and selectively increase loan volume. Furthermore, Wells Fargo plans to expand the scale of its market business to increase profitability while controlling risks. The removal of the asset cap also provides the company with more opportunities, including assessing and utilizing additional business opportunities, and enhancing competitiveness in a changing regulatory and supervisory environment.

Wells Fargo Bank announced that it expects to reduce its pressure capital buffer by 2020 basis points in the fourth quarter, lowering its required regulatory capital minimum and buffer to 8.5%. The bank expressed encouragement for the Federal Reserve's plan to provide more details on the CCAR process and looks forward to the finalization of capital rules to determine the appropriate level of capital holdings. Additionally, the bank supports regulatory authorities reviewing rules and regulations that go beyond safety and soundness to better serve customers and communities. Wells Fargo is committed to maintaining a strong capital position, planning to invest in its core businesses using excess capital and additional capital generation, and continue returning excess capital to shareholders. Furthermore, the bank has made significant progress in multiple business areas, including credit card, automotive, and commercial banking, demonstrating its commitment to continued investment and optimization of its business network to drive growth.

In the second quarter, the bank's financial performance showed growth in both average and end-of-period loans, especially in commercial and industrial loans. At the same time, credit card, auto, and other consumer loans also increased. Despite continued declines in residential and commercial real estate loans, average deposits in business operations increased by 4%. Non-interest income grew by 4%, mainly benefiting from joint ventures related to merchant services and significant growth in investment banking business income. Non-interest expenses increased by 1%, primarily due to increased compensation related to wealth and investment management business income. In terms of credit quality, the net loan charge-off ratio decreased, indicating continued improvement and strong performance in credit quality. In terms of capital and liquidity, the bank maintained a strong capital position, with its common equity Tier 1 capital ratio remaining at 11.1%, exceeding current regulatory requirements, and plans to continue repurchasing stocks and increasing dividends.

Consumer, small business, and commercial banking revenues at Wells Fargo increased compared to the same period last year, primarily due to lower deposit costs and an increase in deposit balances. Despite outflows of funds due to tax payments, deposit balances continued to grow for the second consecutive quarter. Credit card revenue increased by 9%, but auto revenue decreased by 15%, reflecting a decrease in loan balances and pricing pressure on credit. Commercial banking revenue decreased by 6% due to declining interest rates, while investment banking revenue decreased by 7%, mainly due to interest rate impacts but partially offset by increased investment banking revenue and advisory fees. Additionally, wealth and investment management businesses also experienced corresponding financial performance changes.

JPMorgan Chase achieved double-digit growth in net income and earnings per share in the second quarter compared to the same period last year, benefiting from increased fee income in multiple business areas. Despite a decrease in net interest income due to low interest rates, it is expected to remain flat in 2025 compared to 2024. In addition, the bank maintained cost control, improved credit performance, and reduced the number of outstanding common shares. With the removal of the asset cap, management will focus more on growth plans and adjust capital allocation flexibly to deposits, loans, and trading assets.

The conversation detailed the outlook for the bank's net interest income (NII), specifically focusing on the non-market NII component. It involved discussions on assumptions for loan growth, the impact of market business activities, and how to balance asset allocation to maximize overall earnings. The discussion also covered revenue expectations for different business lines, including investment advisory fees, deposit costs, card fees, etc., and analyzed the impact of market fluctuations and increased activity on NII.

With the removal of the asset cap, the company is reconsidering how to balance asset allocation to promote growth and increase returns. This change will be a gradual process rather than an immediate drastic change. The company plans to carefully consider how to use the additional asset capacity in future planning to gradually increase income over time. Additionally, the company is committed to providing more transparency and clarity on this process to help all relevant parties better understand this dynamic.

During the discussion, it was mentioned that the Bank's Capital Adequacy Ratio (CAR) has experienced a significant decrease after a sharp increase. Management believes that more time is needed to understand the capital requirements of the Federal Reserve System (Fed) and the Comprehensive Capital Analysis and Review (CCAR) process in order to determine the long-term capital levels. As the capital adequacy ratio has decreased to lower levels, the Bank plans to deploy excess capital through organic growth or stock repurchases and clearly states that the 15% capital adequacy ratio is only a temporary target, with future targets being higher. The discussion also mentioned that the specifics of stock repurchases will depend on stock prices and opportunities for organic growth within the company, as well as the possibility of dividend growth.

The bank previously restricted its growth in the retail deposit market due to sales practice constraints. Now, with the removal of these constraints, the bank plans to accelerate the growth of retail deposits by increasing marketing efforts, strengthening marketing at branch locations, expanding its business footprint, and adopting a more aggressive marketing strategy. The bank is confident that it can gain a competitive advantage with its customer value proposition, brand strength, and employee quality.

The discussion focused on how banks can actively increase consumer and business deposits while avoiding significant negative impact on the Return on Cost and Time (RoCT), emphasizing the risks of declining profitability in the short term and the strategic importance of obtaining a larger market share in the long term.

The discussion is focused on how to pursue company growth while maintaining financial returns in the next 6 to 18 months, emphasizing that returns will not be sacrificed for growth. At the same time, the company indicates that it will continue to focus on and enhance operational efficiency to save resources to support future investments.

Despite increasing marketing expenses and recruiting in various departments, the company believes that these investments will not dilute returns, but rather drive long-term revenue growth and higher returns by improving efficiency in other areas of the company. The company continues to think in the same strategy and expects these measures to bring higher returns over time.

The company continues to explore opportunities to enhance efficiency through traditional methods and technologies, including artificial intelligence (AI). Despite achieving a 50% revenue growth in the quarter, this growth is not seen as sustainable, especially when considering revenue in the commercial services sector. The discussion also mentioned issues with net interest income (NII) and the potential impact of interest rate changes by the Federal Reserve on asset sensitivity and the company's balance sheet. Despite the market's evolving expectations of the Fed's policies, the company is evaluating and addressing the potential for rate cuts by adjusting asset portfolios and promoting growth to offset their impact.

In the phone conference, we discussed the reasons why specific data regarding Manchester's income in non-market areas was not listed separately, as well as the effects of interest rate changes, loan growth, deposit behavior, and cash rebalancing on the full-year market guidance. Additionally, it was mentioned that providing clearer transaction data would be helpful as trading business grows.

This discussion mainly revolves around the company's lower tax rate for this quarter and the impact of new legislation on clean energy tax credits. Mentioning that the decrease in tax credits due to the new legislation will gradually show its effects in the coming years, while the current quarter's lower tax rate is a result of several factors including changes in California tax laws. Looking ahead, the company expects its tax rate to remain at a high double-digit level in the long term.

During the meeting, Erica from Nigeria at UBS was mentioned during the question and answer session, her phone line has been opened, and she is ready to ask her question.

The conversation centered around the bank's capital adequacy ratio, future capital planning, and response strategies. The discussion touched on the bank's current CET1 capital level, changes in regulatory requirements, and potential future comprehensive stress test reforms. The bank expressed their desire to determine a sustainable capital level after obtaining more information and emphasized that they currently have a significant amount of excess capital, which can be used flexibly to support customers and the economy, while also planning to return capital to shareholders through share buybacks. In addition, the bank mentioned strategic efforts to increase non-interest income and control costs, as well as optimistic expectations for loan growth and deposit flows.

The dialogue discussed how banks can control costs and increase investments by improving efficiency and utilizing technology, especially artificial intelligence, after the removal of asset limits. The banks emphasized that measures and investments taken during the asset limit period will lead to efficiency gains, and further plans to reduce labor costs through natural attrition and technology. However, the banks remain cautious in providing long-term cost forecasts, emphasizing the need to determine the balance of investment and efficiency improvements through planning cycles to increase company returns.

The conversation discussed the early applications of artificial intelligence (AI) in business, including pilot projects in funding systems, operating systems, and call center usage, which are beginning to show potential efficiency improvements. Although the impact of AI is still in its early stages, it is expected to become more apparent over time. In addition, the evaluation of the 15% target was mentioned, including the contribution of merchant service revenue, and there are plans for a more detailed discussion of goals and future strategies by the end of the year.

The discussion focused on the relative stability of loan yields in this quarter, despite expectations of an increase. The commercial loan market is particularly competitive, leading to no significant increase in loan yields, despite expectations of changes in the economic environment and interest rate curves. The intensification of market competition has restrained the expected growth of loan yields, especially in the medium-sized market commercial banking business, although there have been changes in the economic environment, the fluctuations in loan yields are not significant.

Commercial banks mainly face competition pressure from other banks, especially in the middle market sector, although non-bank institutions such as private credit and insurance companies also show competitive trends in some real estate segments. This competitive situation varies by region, but overall, other banks remain the main competitors, affecting expectations for loan growth.

J.P. Morgan Chase Bank has achieved growth in the commercial and industrial loan sector, primarily reflected in the Corporate and Investment Banking division. Specific areas of growth include fund finance, capital call facilities, TMT (technology, media, telecommunications), industrial, healthcare, and asset-backed lending, among others. Market business such as mortgage loans and other types of collateralized loans have also seen growth, as well as a small amount of growth in prime brokerage. This expansion shows a diversified distribution across various business sectors.

During the discussion, it was mentioned that the company has exited the railway equipment leasing business and had previously conducted a review and optimization of various businesses a few years ago, with the railway business portfolio being the last major business to be addressed. Additionally, the conversation also explored whether there are any other businesses that have not met internal profitability targets, which could potentially impact the company's long-term profitability.

In the current optimistic market sentiment, the company has expressed confidence in its mid to long-term operating leverage, emphasizing strategies in both spending and revenue. The company has achieved cost reductions of 12 billion in the past four years, reducing staff numbers for 20 consecutive quarters, demonstrating a determination to improve efficiency. For the future, the company plans to continue seeking growth opportunities in various business areas. Although specific quarterly performance may be affected by market fluctuations, in the long term, the company expects to achieve a dual increase in profits and returns through cost control and business growth.