Wells Fargo (WFC) Soars 3.95% as Fed Lifts Asset Cap

On June 4, 2025, Wells Fargo's stock surged by 3.95% in pre-market trading, marking a significant uptick in investor confidence.

This surge comes on the heels of the Federal Reserve's decision to lift a seven-year asset cap that had been imposed on Wells Fargo. The removal of this restriction, which had limited the bank's asset growth, is seen as a major milestone for the institution. The Federal Reserve's announcement indicates that Wells Fargo has successfully completed all necessary corrective actions and third-party evaluations, demonstrating improved corporate governance and risk management.

Chief Executive Officer Charlie Scharf hailed the decision as a critical turning point in the bank's transformation journey. He expressed gratitude for the opportunity to continue advancing the bank's strategic plans, supported by implemented processes and cultural changes, to enhance returns and growth in a prudent manner. In celebration of this achievement, Wells Fargo plans to reward all full-time employees with a $2,000 bonus, primarily in the form of restricted stock.

This development not only signifies the end of a decade-long scandal for the fourth-largest bank in the U.S. but also paves the way for renewed growth prospects. The asset cap, which was imposed in 2018, had been a significant deterrent to the bank's expansion, costing it an estimated $390 billion in lost profits. With the cap lifted, Wells Fargo is now poised to regain its competitive edge and pursue new opportunities for growth and innovation.