Wells Fargo sets expansion aspirations after asset cap lifted – report

Wells Fargo (NYSE:WFC) aims to build up corporate and investment bank and expand its branded credit-card business, among its list of plans to grow the bank after seven years of being constrained by a $1.95T asset cap, according to a media report published on Thursday.

CEO Charlie Scharf sees a path to become a top five investment bank, he told the Wall Street Journal in an interview. The company also is exploring using its balance sheet to enter the fast-growing business of direct lending, or financing of midsized companies and leveraged buyouts, he said.

After the close of market on Tuesday, the Federal Reserve removed the asset cap, placed on the company in 2018 due to a raft of scandals over dodgy sales practices and compliance failures, and terminated the associated consent order against the bank. While the cap was in place, Wells Fargo (NYSE:WFC) had turned down deposits at its commercial bank, rather than turn away consumer or wealth deposits, Scharf said last week at a conference.

With a freer rein now, the company will also promote to its wealth management clients other services at the bank. It’s also considering whether to originate home equity loans after it pausing the business, Scharf said.

Wells Fargo (WFC) stock ticked up 0.1% in premarket trading.