Is Wells Fargo Close to Exiting Its Asset Cap?
Wells Fargo (NYSE: WFC) has been trading at a discount all year, as earnings have slumped and the bank trimmed its dividend by 80%. Despite the recent rally in the banking sector, Wells Fargo is still trading below tangible book value and significantly lower than book value. The coronavirus pandemic has obviously played a major role in this, but so has the asset cap imposed by the Federal Reserve as punishment for the bank's phony-accounts scandal.
Nearing the third anniversary of the asset cap, analysts and investors have been perplexed about the novel punishment and how long it can last. But now, there may be reason to believe that Wells Fargo is closer to exiting the asset cap than many initially thought, which would be a significant driver for the company's stock price.
Image source: Wells Fargo.
Source Fool.com
