Wells Fargo & Co. executives said the bank's exposure to PG&E Corp. is "absolutely manageable" even as the utility company prepares to file for bankruptcy protection.
President and CEO Timothy Sloan acknowledged during the bank's fourth-quarter 2018 earnings call on Jan. 15 that PG&E Corp. and its utility subsidiary, Pacific Gas and Electric Co., are customers of the bank. PG&E Corp. plans to seek Chapter 11 bankruptcy protection in an effort to manage the fallout from the 2017 and 2018 Northern California wildfires. The reorganization is expected to help the utility resolve an estimated $30 billion in liabilities as a result of the recent wildfires while continuing to provide service to customers, the company said.
Sloan said no single credit will drive results at the bank, pointing to its average loan book of $946.3 billion at the end of 2018. He added that the bank's asset quality so far in the credit cycle has been broadly resilient because of how the bank considers credit risks and opportunities.
PG&E Corp. has also said it is in talks with potential lenders for debtor-in-possession financing. Based on what it called "highly confident" letters from banks, PG&E Corp. said it anticipates securing about $5.5 billion in commitments by the time it files its Chapter 11 petitions in late January that would support ongoing operations.