Wells Fargo's Crippling Asset Cap Has Cost the Bank Billions in Profits. But It Might Be a Tailwind in 2023
In 2016, it came to light that employees from the large U.S. bank Wells Fargo (NYSE: WFC) had been opening bank and credit card accounts without the consent of the bank's customers.
The scandal rocked the banking world, and Wells Fargo has never been the same, largely because it's been dealing with fines and litigation while also working to improve its regulatory infrastructure.
Since early 2018, Wells Fargo has also been operating under an asset cap that prevents the bank from growing its balance sheet, which is a key way banks make money -- by increasing interest-earning assets. The asset cap has been one of the main inhibitors of the stock. But heading into 2023, the asset cap may actually prove to be a tailwind for Wells Fargo. Let me explain.
Source Fool.com