Wells Fargo & Co., the third-biggest U.S. bank by assets, lowered its forecast for return on equity to a range of 11 percent to 14 percent.
The estimate dropped from the previous prediction, given in 2014, of 12 percent to 15 percent, the San Francisco-based company said Tuesday in a slide presentation accompanying its investor day presentation.
Wells Fargo also reduced its forecast for return on assets, which it said will be 1.1 percent to 1.4 percent, down from a previous range of 1.3 percent to 1.6 percent. The target fell in response to lower interest rates, tighter lending spreads and higher provision expenses, according to the bank.
The lower targets are near where the bank has been performing recently, Chief Financial Officer John Shrewsberry told investors in San Francisco.
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The bank left its efficiency-ratio forecast unchanged at 55 percent to 59 percent. It said it expects “continued stress” in the oil and gas portfolio this year, with the potential for additional reserve increases and more credit losses.
Wells Fargo has its largest employee hub in Charlotte after buying Wachovia bank in 2008.