Federal Reserve lifts Wells Fargo asset cap from 2018 order

SAN FRANCISCO - Wells Fargo & Company (NYSE: WFC) announced today that the Federal Reserve has removed the growth restrictions on the bank’s total assets, initially put in place by a 2018 consent order. The lifting of the asset cap follows Wells Fargo’s compliance with the order’s conditions, which included enhancing board effectiveness and improving company-wide compliance and operational risk management programs. These improvements were verified through an independent third-party review, in addition to direct assessments by the Federal Reserve.

The removal of the asset cap is a significant development for Wells Fargo, signaling a turnaround in its operations and governance after years of scrutiny. CEO Charlie Scharf stated that the company has become stronger and fundamentally different due to the transformation efforts, including changes to the business mix and management structure. The transformation is reflected in the bank’s solid fundamentals, with InvestingPro analysis showing a P/E ratio of ~13.4 and a dividend yield of 2.14%. Management has been actively buying back shares, demonstrating confidence in the company’s direction.

In recognition of this milestone, Wells Fargo has announced a special one-time award of $2,000 to all full-time employees, primarily in the form of restricted stock grants. This bonus is extended to a diverse range of employees, from tellers to financial advisors, as a token of appreciation for their contributions to the company’s achievements during challenging times.

Steven D. Black, Chair of Wells Fargo’s Board of Directors, commended the board for its role in reaching this outcome and praised the management team, particularly Scharf, for leading the company through a significant transformation amid economic fluctuations and regulatory challenges.

Wells Fargo, a leading financial services company with approximately $1.9 trillion in assets, offers a wide array of banking, investment, mortgage, consumer, and commercial finance services. With annual revenue of $77.25 billion and an overall Financial Health score of FAIR according to InvestingPro, the company is poised to pursue its goal of consistent growth and respect in the financial sector. InvestingPro’s comprehensive analysis indicates the stock is currently undervalued, suggesting potential upside for investors.

This news is based on a press release statement from Wells Fargo & Company.

In other recent news, Wells Fargo announced the sale of its rail equipment leasing division to a joint venture between GATX Corporation and Brookfield Infrastructure. This transaction, valued at approximately $4.4 billion, aligns with the company’s strategy to streamline its operations and focus on core client services. Meanwhile, Wells Fargo has successfully terminated the Office of the Comptroller of the Currency’s 2015 agreements, marking progress in resolving regulatory issues. This development is part of Wells Fargo’s broader efforts to address historical regulatory challenges, with only one consent order from 2018 remaining. Additionally, Wells Fargo is in preliminary talks with other major U.S. banks, including JPMorgan Chase and Bank of America, to explore the issuance of a joint stablecoin. These discussions aim to counter the growing competition from the cryptocurrency industry. The concept, still in its early stages, could potentially provide a regulated alternative to existing cryptocurrencies.

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