S&P upgrades Wells Fargo to A- following risk management overhauls

Investing.com -- S&P Global Ratings has upgraded Wells Fargo & Company's (NYSE: WFC) long-term issuer credit rating to ‘A-’ from ‘BBB+’, citing significant progress in refining its governance, risk culture, and operational oversight. The upgrade highlights the bank's successful trajectory following the June 2025 termination of its seven-year Federal Reserve asset cap, which has cleared the path for balance sheet growth and deeper client engagement.

Although balance sheet growth has outpaced the broader banking sector, with total assets expanding 15% year-over-year, S&P expects asset expansion to moderate toward industry averages by 2027. Credit performance remains resilient, backed by conservative underwriting in nonbank lending and credit loss metrics that continue to compare favorably against major money-center peers.

The bank maintains a strong capital cushion, with its Common Equity Tier 1 ratio standing at 10.3%, comfortably above regulatory minimums and within its internal target range. A robust deposit base, constituting 72% of total liabilities, alongside a liquidity coverage ratio of 119%, provides solid structural support for ongoing business initiatives.

S&P assigned a stable outlook across all Wells Fargo entities, reflecting expectations that the lender will continue to lift returns toward peer levels while maintaining controlled risk growth. While near-term rating upgrades remain unlikely over the next two years, S&P noted that sustained aggressive expansion or a material erosion in capital buffers could trigger negative rating action.

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