Scott Siefers: Okay. Perfect. Thank you very much.
Operator: Thank you. The next question comes from Ebrahim Poonawala of Bank of America. Your line is open.
Ebrahim Poonawala: Hey, good morning. I guess maybe just to the – thanks for all the details on NII expenses and the ROTCE. I guess if you had to [ph] and it’s not lost upon anyone with regards to the investments you’ve made in the franchise. But when you look at the slide, fourth quarter 2020 ROTCE 8%, three years fast forward, it’s gone from 8% to 9%. Assuming there’s no real perfect world to operate a bank, from a shareholder perspective, quickly, do you think we can get from 9% to 15%? You’ve given us the moving pieces. But I’m just wondering maybe Charlie, Mike, how do you think about, is it a two-year slog? Is it longer than that? Love some perspective there.
Mike Santomassimo: Yes. And I think maybe I’ll start and Charlie can chime in. So I think when you look at that page, Ebrahim, I think you really have to look at the impact of the special assessment that in the results, right? And so that’s four percentage points of ROTCE, so think of the underlying operating performance from a returns perspective, more closer to that 13% range. And so there has been quite a bit of progress since Q4 2020. And then as you sort of look forward, we highlighted some of the key drivers on the right. And in my commentary, look, we’ve got a lot of excess capital despite whatever happens with Basel III. And so we’ve got room to continue to return that to shareholders. We are in the middle of repositioning and the home lending business, which will drive not only good, better returns in that business, but improvement across the franchise.
We’ve got the card business, which we’re seeing very good performance in as we’ve launched our new products over the last couple years. And as that matures, we will be meaningful contributor. And then we’ve got continue to get the benefit of all the other investments that we’re making. And so we feel like we’ve made a lot of good progress since the 2020. And then we’ve got really clear plans to continue to see better performance.
Charlie Scharf: And I’ll just add a little bit to it and to be a little bit repetitive. When you look at that slide, again, those are reported numbers. And so, the way we think about it is the earnings power of the company today on an ROTCE basis, you got to make your own assumptions for what’s in and out and what normalized net interest income is because we’ve been clear that we’ve been over earning. But when you look at, when you add back these expenses like FDIC, which relate to the past and this quarter and aren’t going to go forward. Our ROTCE is up 50% from where it was. So that is significant change. On top of that, when we look at the actions, as Mike said, that we’ve taken in the home lending business, when we see the trajectory of growth that we’re seeing in the card business, just as those things mature, let alone being able to deploy the excess capital we have, those are things that are in process.
We don’t have to really do anything more other than let them mature and let them play out that is continued movement towards the 15% ROTCE. And then the last thing I’d say is just away from those things. When we got here, these businesses were not on trajectories to grow. The card business wasn’t growing, the corporate investment bank wasn’t growing. You can go through them one by one. And so, as we’ve talked about making investments, offsetting some of these efficiencies that we’ve seen and making determinations on whether or not they’re paying off. Those things that we’re seeing these increases in share, we’re pretty confident that they are going to continue to drive improved results over time. And so, as I said in my remarks, we’re clearly susceptible to market environment both for interest rates and the overall economic environment in the shorter term, but we feel both really good about the progress that we’ve made.
We feel really good about what the path we see going forward is recognizing that there’s still a lot more that we have to do.
Ebrahim Poonawala: Got it. That was thorough. Thank you. And just one quick follow-up, Mike, on CRE. I’m assuming you had some assets moved through the – off the balance sheet. I’m just wondering, do – today, relative to a year ago, do you have better visibility on where the clearing prices for some of these non-performing CRE or challenge CRE loans? And are you seeing any pressure spreading beyond CRE offers to other parts of the portfolio in any meaningful way? Thank you.
Mike Santomassimo: Yes. Yes. I mean, look, as time goes by, we’ve got – we get better and better information around where things are going to play out. But it is still somewhat specific to the asset. And so I wouldn’t try to generalize yet until we see more transactions and more data points. When you look at the broader CRE market at least in our portfolio, we are not seeing the stress spread to other parts of it.
Ebrahim Poonawala: Helpful. Thank you.
Operator: The next question will come from Erika Najarian of UBS. Your line is open.
Erika Najarian: Hi, good morning. My first question is a follow-up to Ebrahim line of questioning on ROTCE. Charlie, Mike’s right, obviously, you have plenty of excess capital. As we think about your outlook for not much loan growth in 2024, and obviously there’s the asset cap still in place. How should we think about what you’re looking for as Guidepost to potentially accelerate that buyback from the $2.4 billion level? Is it as far out as the Basel III endgame finalization, or would you wait for more clarity near term on the DFAST results in June?
