As Wells Fargo & Co.’s stock starts to attract the love of analysts and investors again, some are speculating the Federal Reserve may soon lift a cap on the bank’s growth.
The regulator and the company itself aren’t nearly as optimistic.
Some top executives at the San Francisco-based lender privately expect the bank not to exit the limit on assets until late next year at the earliest, while key Fed officials see the process dragging into 2022 or beyond, according to people familiar with their thinking.
The protracted outlooks are largely based on the number of steps remaining for the company to clear, the people said.
Since the cap was imposed in early 2018, investors have tried to figure out how long the sanction might last. It has already forced Wells Fargo to miss billions of dollars in profits.
To get it lifted, executives must show progress in bolstering internal systems, persuade Fed officials to approve a plan for finishing the overhaul, and then undergo a third-party review.
A spokesperson for the Fed declined to comment. The bank has no official estimate for satisfying the regulator.
“The Federal Reserve will determine when the work to fulfill the requirements of the consent order is done to their satisfaction,” Wells Fargo said in a statement.
“We are focused on doing the work. We maintain strong levels of liquidity and capital, and we are committed to using our financial strength to help support the U.S. economy and our clients while operating in compliance with the asset cap,” it added.