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S&P downgrades Wells Fargo on 'prolonged' issues

S&P Global Ratings on Feb. 7 lowered Wells Fargo & Co.'s long- and short-term issuer credit ratings to A- from A and to A-2 from A-1, respectively.

Subsidiary Wells Fargo Bank NA was similarly downgraded — its long-term issuer credit rating to A+ from AA- and its short-term issuer credit rating to A-1 from A-1+.

S&P also lowered the group credit profile to "a" from "a+".

The action follows the Federal Reserve's issuance of a cease and desist order capping the company's asset size to its end-of-2017 level and pushing out another four of its board members. The rating agency said the development showed "more severe" regulatory risk than anticipated, as well as exposure to "prolonged reputational issues." On top of that, its board "continues to be in transition."

The outlooks are stable, reflecting S&P's expectations that the company will continue to make progress and keep its "competitive positions in key businesses."

S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.