Wells Fargo posts higher profits after Fed scraps asset cap

Wells Fargo wrapped up 2025 with stronger profits, riding a wave of higher revenue from loans and fees as the US economy held steady and the bank looks to move past a years-long, Fed-imposed asset cap after a Wall Street scandal that involved the creation of fake accounts.

The nation’s fourth-largest bank by assets reported net income, which is profit left after subtracting all expenses, of $5.4 billion for the fourth quarter, up from $5.1 billion a year earlier.

Earnings per share, or the profit divided among outstanding stock shares, came in at $1.62, beating Wall Street expectations and rising from $1.43 in the same period of 2024.

“We have funded significant increased investments in infrastructure and business growth by driving greater savings, Wells Fargo CEO Charlie Scharf said in a statement. “Evidence of increased growth can be ‌seen across the company.”

“We have built a strong foundation and have made great progress in improving growth and returns, though we have operated with significant constraints. We are excited to now compete on a level playing field and are able to dedicate even more resources with the ability to grow our balance sheet,” he added

Scharf, a former CEO of BNY and Visa, pointed to a ​20% growth in new credit card accounts, a 19% jump in auto lending balances, 12% loan growth in commercial banking, and a 14% increase in investment banking fees as the main drivers behind the bank’s profits.

The company hit the headlines two weeks ago when it came under fire from an 83-year-old Texas grandmother who claimed the bank is refusing to reimburse her $15,000 that was scammed from her by fraudsters.

In June 2025, the Federal Reserve finally lifted a $1.95 trillion asset cap imposed in 2018 after the Wells Fargo fake accounts scandal, where employees opened millions of unauthorized accounts to hit sales targets.

The results mark continued progress for the 60-year-old Scharf, who has streamlined operations since taking over in 2019.

Looking ahead to 2026, the lender expects net interest income to rise, assuming a couple of Federal Reserve rate cuts and steady long-term rates, with loans and deposits growing in the mid-single digits.

The restrictions had crimped growth, forcing the bank to pay billions in fines and overhaul its risk controls.

Regulators scrapped the cap after noting the bank had made “substantial progress” in fixing governance and risk management issues, with Scharf calling it a “pivotal milestone in the bank’s transformation.”

In October, after the cap’s removal, Wells Fargo raised its medium-term profitability goal to a 17% to 18% return on tangible common equity — a key metric of how well the bank generates profits from shareholders’ investments — up from 15%,

Wells Fargo, with about $2.1 trillion in assets, ranks among America’s biggest lenders, serving one in three US households.

The price of its shares jumped in early trading on Wednesday, signaling investor optimism about a rebound for the bank.