S&P upgrades Wells Fargo to 'A-' with a stable outlook

S&P Global Ratings upgraded Wells Fargo & Co.'s issuer credit rating to 'A-' from 'BBB+' on October 1, 2026, maintaining a stable outlook. S&P affirmed the bank's short-term rating at 'A-2' and held its 'A+/A-1' ratings on core operating units. Wells Fargo's stand-alone credit profile rose to 'a' from 'a-', adding one notch of uplift for loss-absorbing capacity.

The agency pointed to major progress in risk controls, culture, and governance. Since 2019, Wells Fargo has terminated 14 consent orders, including one ended in March 2026. The Federal Reserve removed its nearly seven-year balance-sheet asset cap in June 2025. Wells Fargo currently has no outstanding consent orders, although an agreement with the Office of the Comptroller of the Currency on financial crimes and anti-money laundering controls remains open.

Through the second quarter of 2026, bank assets rose 15% year over year and loans grew 12%. Auto lending and nonbank lending balances each climbed 33%, with nonbank loans reaching 22% of total loans. Trading assets also expanded 33% to roughly 11% of total assets. S&P views this growth as manageable and expects it to moderate toward industry rates starting in 2027.

Profitability improved alongside asset expansion. Wells Fargo raised its medium-term return on tangible common equity target to 17%-18% in the third quarter of 2025, up from 15%. Return on tangible common equity reached 16.1% as of June 30, 2026, compared with 14.4% a year earlier. The bank's Common Equity Tier 1 ratio stood at 10.3%, above the 8.5% regulatory minimum, while its risk-adjusted capital ratio was 8.5%. Management indicated proposed U.S. capital changes could trim risk-weighted assets by 7%, adding nearly 80 basis points to the CET1 ratio.

Over the past six months, Wells Fargo shares declined 2.4%, while the broader industry rose 10.3%.