Wells Fargo spent years worried about the past. Now it can focus on the future.

Wells Fargo (WFC) spent years worried about the past. Now it can focus on the future. The fourth-largest US bank plans to pursue growth and expansion in investment banking, credit cards, and wealth management now that it has shed a major growth restriction imposed last decade by regulators as punishment for a fake accounts scandal that roiled the San Francisco-based financial institution. Advertisement: High Yield Savings Offers Earn 4.10% APY** on balances of $5,000 or more View Offer Earn up to 4.00% APY with Savings Pods View Offer Earn up to 3.80% APY¹ & up to $300 Cash Bonus with Direct Deposit View Offer Powered by Money.com - Yahoo may earn commission from the links above. "Now I can start having more fun," Wells Fargo CEO Charlie Scharf said in a Wall Street Journal interview this past week.

The lifting of a $1.95 trillion asset cap will help Scharf go on the offensive as he tries to make Wells Fargo into a major Wall Street investment banking player, edging deeper into a hypercompetitive business where it lags behind Wall Street giants like Goldman Sachs (GS), JPMorgan Chase (JPM), and Morgan Stanley (MS).Wells Fargo CEO Charlie Scharf speaks during an interview with CNBC on the floor at the New York Stock Exchange on June 4. (Reuters/Brendan McDermid)·REUTERS / Reuters In fact, Scharf told the Wall Street Journal he wants Wells Fargo to be one of the top five investment banks, and "then there'll be an argument about, 'Well, why top five? Why not four or three?'" On Main Street, Wells Fargo also wants to play catch-up after missing out on major opportunities to lap up deposits during the COVID-19 pandemic and the 2023 regional banking turmoil. It also wants to add more credit card products and better integrate its wealth management with its retail branches. Its growing pains under the asset cap have for years put Wells Fargo at an increasing disadvantage behind larger rivals — "the gift that keeps giving" for competitors, Piper Sandler bank analyst Scott Siefers told Yahoo Finance. Growing its US consumer bank is where the "heavy lifting" is needed to move Wells Fargo's stock higher, TD Securities analyst Steven Alexopoulos added in a note this past week.

The consumer business pulls in almost half of the bank's revenue. Still, "igniting growth in this area is far from a layup," Alexopoulos added. Even after passing its crucial milestone, Wells Fargo's stock didn't soar, ending up 2% this past week. But it is up 30% for the past 12 months, ahead of rivals Citigroup (C) and Bank of America (BAC) while lagging JPMorgan and Goldman Sachs. NYSE - Delayed Quote•USD (WFC) Follow View Quote Details 76.33 - +(1.91%) At close: June 6 at 4:00:15 PM EDT WFCBAC JPM Advanced Chart "We didn't change any EPS estimates ...

but now and over time I think they are in a growth mode, and ideally market share gain mode," Piper Sandler's Siefers said. One place Wall Street expects Wells Fargo to more quickly show improvement over the near term is its spending on risk and compliance costs. For years, the bank has funneled millions into ramping up those operations to meet regulators' expectations. Now that Wells Fargo's growth restrictions have been removed, analysts hope a lot of the extra spending will be plowed back into growing the bank. Story continues To catch up with bigger rivals JPMorgan and Bank of America, that will mean investing some compliance cost savings into its brick-and-mortar branch network, stocking those buildings with investment advisers, and spending more on marketing efforts for its credit cards.

Perhaps the most significant thing for Wells Fargo this week is that its overseers have signaled "a clean bill of health," according to Siefers. "The bank can no longer be pointed to as the sick child of the industry, and I think all this time with that regulatory scrutiny and restriction has probably also left it as the cleanest big bank in the country." On Friday, S&P Global upgraded its outlook on Wells Fargo to "positive" from "stable" and said it expects Wells to expand its commercial and investment banking business — "the unit most affected by the asset cap and one that had to turn away some nonoperational deposits from customers." The milestone for Wells this week drew praise from one of the bank's rivals, JPMorgan CEO Jamie Dimon, Scharf's former boss earlier in his career. "Charlie and his team worked extremely hard to resolve these heritage issues, which is good for the entire banking system," Dimon said in emailed comments. Even Dimon has acknowledged that he expects Wells Fargo to be a much more formidable competitor going forward. Not that it will be easy.

"The bank has changed a lot, and yes, they're going to grow. They may see assets grow, but all the banks are going to see assets grow," Chris Whalen, chairman of Whalen Global Advisors, told Yahoo Finance. David Hollerith is a senior reporter for Yahoo Finance covering banking, crypto, and other areas in finance. Click here for in-depth analysis of the latest stock market news and events moving stock prices Read the latest financial and business news from Yahoo Finance View comments