June 6 (Reuters) - S&P Global ( SPGI ) upgraded its

outlook on Wells Fargo ( WFC ) to "positive" from "stable", the

ratings provider said on Friday, after the U.S. bank was

released from a $1.95 trillion asset cap earlier this week.

The U.S. Federal Reserve's unprecedented, seven-year long

punitive measure was imposed on Wells in 2018 and restricted

balance sheet growth so the bank could address rampant

governance and compliance concerns that had been brought to

light in a fake accounts scandal in 2016.

The Fed's unanimous decision on Tuesday capped years of

efforts by the bank to repair the damage and pay off billions of

dollars in fines, sending Wells Fargo ( WFC ) shares to a three-month

high a day later. The stock has gained nearly 8.3% in a year

where the benchmark S&P 500 has remained flat.

"The positive outlook on the holding company reflects our

view that Wells Fargo ( WFC ) has substantially improved its underlying

governance, risk, and control profile, allowing for the removal

of the Fed's asset cap," said S&P.

S&P also 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."

While the fourth-largest U.S. lender was forced to carefully

manage wholesale deposits and its markets business, assets of

peer JPMorgan Chase ( JPM ) swelled by nearly $2 trillion since

the start of 2018, while those of Bank of America ( BAC ) and

PNC Financial added about $1 trillion and nearly $200

billion, respectively.