WFC Wells Fargo and Company

By Emily Glazer 

Wells Fargo & Co. Chairman and Chief Executive John Stumpf said that the bank's profit margins may stay pressured though he doesn't see negative interest rates coming to the U.S.

"Today there are a lot of headwinds in our industry," said Mr. Stumpf, pointing to losses in oil and gas portfolios and interest rates that in some parts of the world have turned negative as central banks try to stimulate their economies.

Mr. Stumpf spoke at the bank's relatively quick annual shareholder meeting in Scottsdale, Ariz., where the veteran executive said that rates though may stay lower for longer than some expect. That could cause the firm's net-interest margin, a key profitability metric for banks, to "stay under pressure," he said. The bank's net interest margin, or NIM, fell to 2.9% in the first quarter from 2.95% in the year-earlier period.

The 2008 financial crisis, and the Dodd Frank rules and Basel accords that followed have helped keep profitability low, said Mr. Stumpf, whose San Francisco bank is the largest in the U.S. by market value and third-largest by assets.

"We now keep a lot more liquidity on the balance sheet," he said. "We try to encourage our investors not to focus so much on the [net interest] margin because we're still growing the net interest income."

Meanwhile, a shareholder proposal for an independent chairman at Wells Fargo received 17% of votes in favor, according to estimates from the bank. That is among the lowest percentage in recent years, and the 11th year in a row such a proposal has failed.

The second shareholder proposal asking for a report on the bank's lobbying practices and policies failed, garnering an estimated 9% of shareholder votes, according to the bank.

Mr. Stumpf said the bank's policy is that it cannot use any corporate funds for political campaigns or campaign committees. It also informs all industry associations that none of the money it gives them can be used for any practices including political campaigns, committees or political parties. Other big U.S. banks give money to Democratic and Republican parties, such as national conventions.

Wells Fargo received a majority of the vote for its executive compensation. It didn't disclose estimated figures.

Wells Fargo didn't hear any complaints from shareholders on mortgage-related practices, which has been a more prominent theme of its meetings in the years after the financial crisis.

The majority of shareholders also approved all the bank's 15 board directors though the bank didn't disclose estimated votes for each director. Judith M. Runstad, former chairwoman of the board of the Federal Reserve Bank of San Francisco, is retiring from the board after joining in 1998.

Mr. Stumpf received just two questions on capital returns and net-interest margins along with shareholder praise on the bank's Hispanic community hiring and involvement.

Shareholders also approved the appointment of KPMG as the bank's auditor.

Write to Emily Glazer at emily.glazer@wsj.com

(END) Dow Jones Newswires

April 26, 2016 13:09 ET (17:09 GMT)

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