Bank of America or Wells Fargo: Which Big Bank Offers More Upside?

By Riya Anand | February 26, 2026, 11:21 AM

Bank of America BAC and Wells Fargo WFC are two of the four largest U.S. banks and are classified as systemically important financial institutions. Both institutions derive significant net interest income (NII) and maintain substantial exposure to consumer banking, leaving them highly responsive to shifts in interest rates and overall economic conditions.

Although they operate under similar macroeconomic influences, their strategic positioning differs. Wells Fargo has regained greater operational flexibility following the removal of its asset cap, while Bank of America continues to benefit from solid momentum in its investment banking division.

With these factors in mind, a closer examination of their long-term growth outlooks can help determine which bank currently offers the more compelling investment opportunity.

The Case for BAC

Bank of America, one of the most rate-sensitive banks in the country, is prioritizing organic, domestic growth through the expansion of its physical and digital presence. This is part of a broader strategy to solidify customer relationships and tap into new markets, driving NII growth over time. By 2027, the company plans to expand its financial center network and open more than 150 centers.

Despite the Federal Reserve’s three interest rate cuts in 2025, Bank of America is expected to witness continued improvement in NII and net interest yield in the near term, supported by loan growth and stabilizing funding costs. Management expects NII (FTE) to grow 5-7% year over year in 2026.

Coupled with the growing adoption of digital tools, such as the Zelle money transfer system and the AI-powered assistant Erica, these initiatives support BAC's ability to enhance digital engagement and cross-sell a range of products, including mortgages, auto loans and credit cards.

BAC’s investment banking (IB) business is well-positioned to expand as deal-making activities have regained momentum. As the market for global mergers and acquisitions has been improving, the company will continue to witness solid growth in IB fees, driven by a healthy IB pipeline. In 2025, IB fees increased 8.4% on a year-over-year basis.

Over the next three to five years, BAC aims to deliver 12% of earnings growth and a return on tangible common equity (ROTCE) between 16% and 18%.

The Case for WFC

Wells Fargo is moving to expand across multiple business lines now that the Fed has lifted the asset cap that limited its growth since 2018. With this, the company can now boost deposits, grow its loan portfolio and broaden its securities holdings. This will lead to an increase in NII, going forward. WFC intends to expand fee-generating businesses like payment services, asset management and mortgage origination. These fee income-generating opportunities will bolster its top-line mix.

Wells Fargo is adopting a more balanced approach to its operations. While the bank is reducing headcount and streamlining processes, it is investing in its branch network and digital upgrades. This allows the bank to maintain a focus on cost management.

Wells Fargo is taking a strategic approach to its branch network, reducing its total branches by 2.1% year over year to 4,090 in 2025. At the same time, it continues to invest and optimize its branch network to reduce costs. In 2025, the company refurbished approximately 700 branches, with more than half of its branch network now upgraded and the remaining branches expected to be completed over the next few years.

Wells Fargo has signaled that interest rate cuts will help stabilize funding costs, making deposit growth a central pillar of its balance sheet strategy. With lower rates and asset cap removal, the bank aims to aggressively grow consumer and corporate loan assets. Average loans are expected to increase in the mid-single-digit rate in 2026. WFC expects NII to be $50 billion in 2026, supported by balance-sheet growth, a favorable loan and deposit mix, and continued fixed-asset repricing.

BAC & WFC: Price Performance, Valuation & Other Comparisons

In the past year, shares of Bank of America and Wells Fargo have gained 17.1% and 13.2%, respectively.

Price Performance